Supplier Interest Provision—Exercises

Basic Data Setup

Enter Interest Template

Purpose: The purpose of this exercise is to show you how to create an interest template

Windows:
Interest Templates

  1. Open the Interest Templates window.
  2. Create a new record.
  3. Enter the following information in the header:
Template ID Description Calculate
 Interest		 Default Template for Supplier 
3 Interest Template for Supplier Select

Select
  1. Enter the following information in the Interest Invoicing When Due/Paid tab:
Interest Method Min Interest
Amount		 Min Interest
Amount Total		 Payment Terms
on Invoice		 Accepted
Delay
When Due for Payment 10 30 0 5
  1. Create a new record in the table section of the window. Then enter the data below to complete the new template.
Valid From Interest
Rate
Three months prior to today's date 20
  1. Save your changes.

Connect Interest Template for Supplier

Purpose: The purpose of this exercise is to show you how to connect an interest template for a supplier.

Windows:
Supplier

  1. Open the Supplier window and click the Payment tab.
  2. In the Interest Template field select the interest template you created from the List of Values.
  3. Save the information.

Required Data

Enter Supplier Invoice

Purpose: The purpose of this exercise is to show you how to enter the supplier invoices that will be used in the exercises below.

  1. Enter five invoices for your supplier. Use payment term 0 (Due Immediately).
  2. Save the invoices. The due date for these invoices/installments should be in the past. Make sure that the due dates are different. 
  3. Right-click and select Installment Plan and Discounts to view the invoice installment plan.
  4. Select the Exclude from Interest Provision check box for one of the invoices and save the installment plan.
  5. Authorize the invoices for payment.

General Exercises for Supplier Invoicing using VAT Regime
General Exercises for Supplier Invoicing using Sales Tax Regime
General Exercises for Supplier Invoicing using Mixed Tax Regime
General Exercises for Authorize Invoices for Payment

Main Exercise

Purpose: The purpose of this exercise is to learn how to prepare invoices for interest provision, create a supplier interest provision proposal and how to process the provision amounts.

Windows:
Supplier Interest Provision Proposal
Exclude Fully Paid Installments
 Voucher Entry

Exclude Invoices from Interest Provision

  1. Open the Exclude Fully Paid Installments window.
  2. Enter a date in the Exclude Installments Fully Paid Until field if you want the system to automatically select the Exclude from Interest Provision check box for all installments paid before the specified date.

Note: If you want to include any invoices which are already selected as not to be included in interest provisions, you need to manually clear the check box using the invoice installment plan.

Create Supplier Interest Provision Proposal

  1. Open the Supplier Interest Provision Proposal window.
  2. Right-click and select Create Interest Provision Proposal.
  3. Enter the following information:
Accounting Year Accounting Period Currency
Rate Type
Current accounting year Current accounting period Your default currency rate type
  1. Confirm the information by clicking OK. A provision proposal for the current accounting period will be created and shown in the Supplier Interest Provision Proposal window.

Modify Interest Calculation Information

  1. Open the Supplier Interest Provision Proposal window.
  2. Query for the interest provision proposal you created in the previous exercise.

Note: You can print a preliminary report containing information on all invoices included in the proposal by selecting Print Preliminary Report. This report can be printed as many times as you want until you acknowledge a proposal.

  1. Select the proposal, right-click and select Interest Provision Proposal Details. The Interest Provision Proposal Details window will be displayed. You will see one summarized line for the supplier to which you entered the supplier invoices with the total provision amount applicable to all invoices.
  2. Right-click and select Invoices per Proposal. The Invoices per Interest Provision Proposal window will be displayed. Note that interest provision information for four out of the five invoices are displayed. The invoice for which you selected the Exclude from Interest Provision check box will not be included.
  3. Assume you have already paid a certain amount of interest to a supplier for an invoice which is due. Select the invoice for which you paid interest already and modify the Posted Interest Amount field with the amount already paid. Note that the actual interest amount will change accordingly.
  4. Save the information.

Note: It is possible to view detailed information on how interest provision has been calculated for an invoice by right-clicking on an invoice record and selecting Interest Calculation per Invoice.

Acknowledge Supplier Interest Provision Proposal

  1. Open the Supplier Interest Provision Proposal window.
  2. Select your interest proposal, right-click and then click Acknowledge Proposal.

  3. The status of the interest proposal changes to Acknowledged.

Print Definitive Report

  1. Open the Supplier Interest Provision Proposal window.
  2. Select your interest proposal, right-click and then click Print Definitive Report.

  3. A report will be printed with all interest provision information included in the proposal and the total amount of interest provision made per each supplier group and the whole proposal.

Note: Using this information you can create separate vouchers to post interest provision amounts relating to each supplier group or post the total interest provision for the period through one voucher.

Post Supplier Interest Provision

  1. Open the Voucher Entry window.
  2. Enter a manual voucher for the total interest provision amount for the proposal you created in the earlier exercise. Make sure that you specify the last day of the period as the voucher date.
  3. Save the information.

  4. Right-click and select Interim Voucher. The first date for the immediate next period will be suggested. Click OK.

  5. The interim voucher will be created with reverse postings for the original voucher.

  6. Note the numbers of both vouchers you created. Open the Supplier Interest Provision Proposal window.

  7. Query for your interest proposal.

  8. Enter the number of the manual voucher you created in the Vou No Ref field.

  9. Enter the number of the interim voucher you created in the Reversal Voucher No Ref field.

  10. Save the information.

General exercises for Manual Voucher Entry

Basic Data Setup

Purpose: The purpose of the following exercises is to enter the basic data to calculate interest on overdue invoices when they are due for payment.

Create Interest Template

Purpose: The purpose of this exercise is to create an interest template with interest method WhenDueForPayment.

Windows:
Interest Templates

Create an interest template with the same details as that created in exercise Customer Credit Information

Connect Interest Template to Supplier

Purpose: The purpose of this exercise is to connect the interest template that enables interest to be calculated when invoices are due for payment, to the supplier that you want to use for this exercise.

Windows:
Supplier

  1. Open the Supplier window and query for the supplier you want to use in this exercise.
  2. Select the ID of the interest template you created above for the Interest Template field in the Payment tab.
  3. Save the information.

Required Data

Enter Supplier Invoice

Purpose: The purpose of this exercise is to enter the supplier invoices that will be used in the exercises below.

Windows:
Manual Supplier Invoice
Authorize Invoices for Payment

  1. Enter three invoices for your supplier with the following details.
Invoice Number Invoice Date Payment Terms Tax Code Net Amount
SUP1 2008-04-20 0 0 10,000
SUP2 2008-04-20 0 0 10,000
SUP3 2008-04-20 0 0 10,000

General exercises for Arrival Entry Supplier Invoice.

  1. Authorize the three supplier invoices for payment.

General exercises for Authorize Supplier Invoice

Manual Supplier Payment

Purpose: The purpose of this exercise is to create a full payment for one of the invoices created in the previous exercise, and a partial payment for another. As a result, you will be able to compare the difference in the interest provision, depending on whether the invoice was fully paid, partially paid or unpaid at the time it is calculated.

Windows:
Supplier Payment

Enter and approve a payment of 10,000 for invoice number SUP1 and a payment of 5,000 for invoice number SUP2. The payment date should be 2008-04-25.

General Exercises for Enter and Match Supplier Payment

Main Exercise

Purpose: The purpose of this exercise is to understand the approach used to calculate the interest provision for overdue invoices when the interest method used is WhenDueForPayment.
 

Three invoices with the same invoice amount and due date were created in Required Data exercises above. One invoice was paid in full after five days, another was partly paid on the same date and the other invoice was left unpaid. As a result, you would be able to see how the interest provision amount calculated for each invoice will be different based on the due amount on the date on which the interest provision is calculated.

Create Supplier Interest Provision Proposal

Purpose: The purpose of this exercise is to show how overdue invoices with the same due date and different due amounts would be handled in a supplier interest provision proposal when the interest method used is WhenDueForPayment.

Windows:
Supplier Interest Provision Proposal

  1. Open the Supplier Interest Provision Proposal window. Right-click in the background of the window and then click Create Interest Provision Proposal to open the Create Supplier Interest Provision Proposal dialog box.

  2. Enter 2008 in the Accounting Year field, and 4 in the Accounting Period field. Note that the last date of period 4 automatically appears in the Interest Provision Date field.

  3. Click OK. The supplier interest provision proposal you created will be displayed in the Supplier Interest Provision Proposal window.

  4. Select interest provision proposal window, right-click and then click Interest Provision Proposal Details to open the Interest Provision Proposal Details window. The supplier you used for this exercise and the total interest provision calculated for the supplier will be displayed.

  5. Select the supplier, right-click and click Invoices per Proposal to open the Invoices per Interest Provision Proposal window. The interest provision calculated for each invoice you created for the purpose of this exercise will be displayed as follows.

Invoice No Actual Provision Amount
SUP1 13.70
SUP2 20.55
SUP3 27.40
  1. To view the interest provision calculation, select each invoice, right-click and click Interest Calculation per Invoice.

    The following details will be displayed for invoice number SUP1.
Int Calc Date From Int Calc Date Until Number of Days for Interest Rate Interest Based Amount Paid Amount Interest Amount Interest Rate
04/21/2008 04/25/2008 5 10,000 10,000 13.70 10%

         The following details will be displayed for invoice number SUP2.

Int Calc Date From Int Calc Date Until Number of Days for Interest Rate Interest Based Amount Paid Amount Interest Amount Interest Rate
04/21/2008 04/25/2008 5 10,000 5,000 13.70 10%
04/26/2008 04/30/2008 5 5,000   6.85 10%

        The following details will be displayed for invoice number SUP3.

Int Calc Date From Int Calc Date Until Number of Days for Interest Rate Interest Based Amount Paid Amount Interest Amount Interest Rate
04/21/2008 04/30/2008 10 10,000   27.40 10%

Basic Data Setup

Purpose: The purpose of the following exercises is to enter the basic data to calculate interest on overdue invoices when they are partly paid.

Create Interest Template

Purpose: The purpose of this exercise is to create an interest template with interest method WhenPartlyPaid.

Windows:
Interest Template

Create an interest template with the same details as that created in exercise Customer Credit Information.

Connect Interest Template to Supplier

Purpose: The purpose of this exercise is to connect the interest template that enables interest to be calculated when invoices are partly paid, to the supplier that you want to use for this exercise.

Windows:
Supplier

  1. Open the Supplier window and query for the customer you want to use in this exercise.
  2. Select the ID of the interest template you created above for the Interest Template field in the Payment tab.
  3. Save the information.

Required Data

Enter Supplier Invoice

Purpose: The purpose of this exercise is to enter the supplier invoices that will be used in the exercises below.

Windows:
Manual Supplier Invoice
Authorize Invoices for Payment

  1. Enter three invoices for your supplier with the following details.
Invoice Number Invoice Date Payment Terms Tax Code Net Amount
SUP4 2008-06-20 0 0 10,000
SUP5 2008-06-20 0 0 10,000
SUP6 2008-06-20 0 0 10,000

General exercises for Arrival Entry Supplier Invoice.

  1. Authorize the three supplier invoices for payment.

General exercises for Authorize Supplier Invoice

Manual Supplier Payment

Purpose: The purpose of this exercise is to create a full payment for one of the invoices created in the previous exercise, and a partial payment for another. As a result, it will be possible to identify the difference in the way in which overdue invoices are handled by the interest template used, depending on whether the invoice was fully paid, partially paid or unpaid at the time interest provision is calculated.

Windows:
Supplier Payment

Enter and approve a payment of 10,000 for invoice number SUP4 and a payment of 5,000 for invoice number SUP5. The payment date should be 2008-06-25.

General Exercises for Enter and Match Supplier Payment

Main Exercise

Purpose: The purpose of this exercise is to understand the approach used to calculate the interest provision for overdue invoices when the interest method used is WhenPartlyPaid.
 

Three invoices with the same invoice amount and due date were created in Required Data exercises above. One invoice was paid in full after five days, another was partly paid on the same date and the other invoice was left unpaid. As a result, you would be able to see how the interest provision amount calculated for each invoice will be different based on the due amount on the date on which the interest provision is calculated.

Create Supplier Interest Provision Proposal

Purpose: The purpose of this exercise is to show how overdue invoices with the same due date and different due amounts would be handled in a supplier interest provision proposal when the interest method used is WhenPartlyPaid.

Windows:
Supplier Interest Provision Proposal

  1. Open the Supplier Interest Provision Proposal window. Right-click in the background of the window and then click Create Interest Provision Proposal to open the Create Supplier Interest Provision Proposal dialog box.

  2. Enter 2008 in the Accounting Year field, and 6 in the Accounting Period field. Note that the last date of period 6 automatically appears in the Interest Provision Date field.

  3. Click OK. The supplier interest provision proposal you created will be displayed in the Supplier Interest Provision Proposal window.

  4. Select interest provision proposal window, right-click and then click Interest Provision Proposal Details to open the Interest Provision Proposal Details window. The supplier you used for this exercise and the total interest provision calculated for the supplier will be displayed.

  5. Select the supplier, right-click and click Invoices per Proposal to open the Invoices per Interest Provision Proposal window. Note that invoice number SUP6 (for which no payment was made) is not included in the interest provision proposal. This is because the interest method used in this exercise is WhenPartlyPaid which involves calculating interest only after a payment is made for the invoice. The calculation of the interest provision is based on the paid amount. The interest provision calculated for each invoice you created for the purpose of this exercise will be displayed as follows.

Invoice No Actual Provision Amount
SUP4 13.70
SUP5 6.85

  1. To view the interest calculation for each invoice, select the invoice, right-click and click Interest Calculation per Invoice. The following information will be displayed for invoice numbers SUP4 and SUP5.

Invoice No Int Calc Date From Int Calc Date Until Number of Days for Interest Rate Interest Based Amount Paid Amount Interest Amount Interest Rate
SUP4 04/21/2008 04/25/2008 5 10,000 10,000 13.70 10%
SUP5 04/21/2008 04/25/2008 5 5,000 5,000 6.85 10%

Basic Data Setup

Purpose: The purpose of the following exercises is to enter the basic data to calculate interest on overdue invoices when they are fully paid.

Create Interest Template

Purpose: The purpose of this exercise is to create an interest template with interest method WhenFullyPaid.

Windows:
Interest Template

Create an interest template with the same details as that created in exercise Customer Credit Information.

Connect Interest Template to Supplier

Purpose: The purpose of this exercise is to connect the interest template that enables interest to be calculated when invoices are fully paid, to the supplier that you want to use for this exercise.

Windows:
Supplier

  1. Open the Supplier window and query for the supplier you want to use in this exercise.
  2. Select the ID of the interest template you created above for the Interest Template field in the Payment tab.
  3. Save the information.

Required Data

Enter Supplier Invoice

Purpose: The purpose of this exercise is to enter the supplier invoices that will be used in the exercises below.

Windows:
Manual Supplier Invoice
Authorize Invoices for Payment

  1. Enter three invoices for your supplier with the following details.
Invoice Number Invoice Date Payment Terms Tax Code Net Amount
SUP7 2008-09-20 0 0 10,000
SUP8 2008-09-20 0 0 10,000
SUP9 2008-09-20 0 0 10,000

General exercises for Arrival Entry Supplier Invoice.

  1. Authorize the three supplier invoices for payment.

General exercises for Authorize Supplier Invoice

Manual Supplier Payment

Purpose: The purpose of this exercise is to create a full payment for one of the invoices created in the previous exercise, and a partial payment for another. As a result, it will be possible to identify the difference in the way in which overdue invoices are handled by the interest template used, depending on whether the invoice was fully paid, partially paid or unpaid at the time interest provision is calculated.

Windows:
Supplier Payment

Enter and approve a payment of 10,000 for invoice number SUP7 and a payment of 5,000 for invoice number SUP8. The payment date should be 2008-09-25.

General Exercises for Enter and Match Supplier Payment

Main Exercise

Purpose: The purpose of this exercise is to understand the approach used to calculate the interest provision for overdue invoices when the interest method used is WhenFullyPaid.

Create Supplier Interest Provision Proposal

Purpose: The purpose of this exercise is to show how overdue invoices with the same due date and different due amounts would be handled in a supplier interest provision proposal when the interest method used is WhenFullyPaid.

Windows:
Supplier Interest Provision Proposal

  1. Open the Supplier Interest Provision Proposal window. Right-click in the background of the window and then click Create Interest Provision Proposal to open the Create Supplier Interest Provision Proposal dialog box.

  2. Enter 2008 in the Accounting Year field, and 9 in the Accounting Period field. Note that the last date of period 9 automatically appears in the Interest Provision Date field.

  3. Click OK. The supplier interest provision proposal you created will be displayed in the Supplier Interest Provision Proposal window.

  4. Select interest provision proposal window, right-click and then click Interest Provision Proposal Details to open the Interest Provision Proposal Details window. The supplier you used for this exercise and the total interest provision calculated for the supplier will be displayed.

  5. Select the supplier, right-click and click Invoices per Proposal to open the Invoices per Interest Provision Proposal window. Note that only invoice number SUP9 is included in the interest provision proposal.

  6. To view the interest calculation for invoice number SUP9, select the invoice, right-click and click Interest Calculation per Invoice to open the Interest Calculation per Invoice window. The following information will be displayed.

Int Calc Date From Int Calc Date Until Number of Days for Interest Rate Interest Based Amount Paid Amount Interest Amount Interest Rate
09/21/2008 09/25/2008 5 10,000 10,000 13.70 10%

Basic Data Setup

Purpose: The purpose of this exercise is to enter basic data that would enable interest with fine to be calculated for overdue supplier invoices.

Enter Interest Template

Purpose: The purpose of this exercise is to create an interest template that can be used to calculate interest and fine on overdue supplier invoices.

Windows:
Interest Templates

  1. Open the Interest Templates window and create a new record.

  2. Enter 6 in the Interest Template field and Fine on Overdue Customer Invoices in the Description field.

  3. Select the Calculate Interest check box.

  4. Open the Interest and Fine at Payment tab.

  5. Select Simple Interest for the Interest Calculation Method field.

  6. Enter 10.00% in the Interest Rate per Month field and 5.00% in the Fine Rate field.

  7. Save the interest template.

Connect Interest Template to Supplier

Purpose: The purpose of this exercise is to connect the interest template that enables interest and fine to be calculated for overdue invoices, to the supplier that you want to use for this exercise.

Windows:
Supplier

  1. Open the Supplier window and query for the supplier you want to use in this exercise.
  2. Select the ID of the interest template you created above for the Interest Template field in the Payment tab.
  3. Save the information.

Required Data

Enter Supplier Invoice

Purpose: The purpose of this exercise is to enter a supplier invoice for which interest and fine can be calculated.

Windows:
Manual Supplier Invoice
Authorize Invoices for Payment

 

Enter a supplier invoice as follows.

Invoice Number Invoice Date Payment Terms Tax Code Net Amount
SUP10 2008-09-20 0 0 10,000

General exercises for Arrival Entry Supplier Invoice.

  1. Authorize the three supplier invoice for payment.

General exercises for Authorize Supplier Invoice

Main Exercise

Purpose: The purpose of this exercise is to show how interest and fine is calculated for an overdue supplier invoice based on the information entered  in the interest template.

Windows:
Mixed Payment

  1. Open the Mixed Payment window and create a new record in the General tab.

  2. Select BANK from the List of Values for the Cash Account field.

  3. Enter the payment date as 2008-09-25 in the Payment Date field.

  4. Select Detailed from the list for the Balance Method field.

  5. Open the Transactions tab and enter a transaction line as follows.

Payment Transaction Type Series ID Invoice/Prepaym No
Enter Supplier Payment SI SUP10
  1. Save the transaction line.
  2. Select the transaction line, right-click and then click Match Payment. The Matching dialog box will open. Note that an interest amount of 166.67 and a fine amount of 500 has been calculated for invoice number SUP10.

    By entering the payment date as 2008-09-25, invoice SUP10 was paid five days after the due date. The interest amount for five days was calculated by multiplying the invoice value of 10,000 by the monthly, interest rate of 10%, dividing it by 30 and then multiplying it again by 5.

    The fine amount of 500 is calculated by applying the fine rate of 5% to the invoice value of 10,000.
     
  3. Click OK to close the Matching dialog box.
  4. Right-click in the header of the Mixed Payment window, and click Approve to approve the mixed payment.