Prerequisites

The posting control functions of the standard interest calculation program have been enhanced to incorporate the function Interest to Financial Assets Management (for loans given).

This means that interest can be calculated on the basis of contract conditions in the Loans Management area. This option can only be used if the loan has the condition item Interest on arrears.

To calculate interest on arrears for overdue items, set the Interest Calculation Type indicator to P. This indicator controls whether the interest is calculated on the basis of loan conditions.

To ensure that interest is only calculated once for each open item, activate the Maintain master records indicator. In this case, a batch input session is created with the name specified in the Batch input session name field. When you process the session, the key date of the last interest run is entered in the customer master record. When you carry out the next interest run, the system ensures that interest is not calculated again for open items up to this key date.

You cannot use this function for loans that are based on the product category Mortgage Loans (300), General Loans (330), and Consumer Loans (340). Use the Interest on Arrears Calculation function for these loans.

Do not use this function for loans that are based on the product category Installment Loans (360).

Procedure

In the SAP Easy Access Menu chose Accounting → Bank Applications → Loans Management → Accounting → Receivables /Payables Management → Interest on Arrears → Overdue Items .

The Calculate Interest on Arrears screen appears. Enter your selection criteria, including

Calculation period

Method for interest calculation

The form and print options for the letters

and so on

For more information about the interest calculation functions, see Financials → Accounts Receivable and Accounts Payable ® Interest Calculation in the SAP Library.

Once the interest on arrears has been determined, you need to generate the corresponding debit items in Loans Management. . The postings to accounts receivable are only made with this debit position run.

Process the batch input session for entering the key date for the interest calculation in the customer master.