Statement of Interest due on Invoices @ Tally.ERP9

Query

How to calculate interest due on each invoice?

Answer

You can calculate interest on each invoice for the period it is outstanding wholly or partly. Transaction by transaction or bill-by-bill interest calculation is permitted for Party accounts like accounts falling under the groups Sundry Debtors and Sundry Creditors. Bill-wise details should be active for the company and the party.

The report is similar to the Bill-wise Outstanding Statement. The last column gives the interest amount on the transaction. Press Detailed to see the calculation.

Go to Gateway of Tally -> Display ->Statements of Accounts -> Interest Calculations -> Ledger

Select Account, e.g., CP Ltd

The interest is re-calculated with every change in balance outstanding. The credit in the interest amount should not be confused to mean an income. It only means that it is payable and is a liability. The figure is illustrative only and you will need to account for the interest expense and liability through a journal entry.

To ease the recording of  interest, Tally.ERP 9 has an interest template, as a special voucher class in Debit Note and Credit Notes.