Write off Default Interest

Write off Default Interest

Purpose

There may be circumstances where it is necessary to write off or reverse Default Interest charges

There is an important distinction between writing off and reversing Default Interest:

  • Interest write offs will credit the account, and the Default Interest income will be written off in the General ledger
  • Reversing the interest will remove the interest charge from the current balance, and add the amount to the accrued interest. The reversed interest will be re-charged on the next interest date.

Access

  1.  |  | 
  2. Account Browse |  | 

Process


 Transactions

Field
Explanation
Transaction Type
[F2] to access the Transaction Type Browse

Scroll down to select the Transaction Type required
  1. See note below for assistance with selecting a transaction type
Value Date
Enter the date that the default interest was charged
Input Date
Display only field

Will default to the earlier of todays date or the month end date
Reference
Enter a reference for the transaction
Description
Enter a description for the transaction
Amount
Enter the amount of the default interest charged on that date

There should always be a leading minus (-)
Tax Code
Will be automatically generated by the tax code assigned to the transaction type


 E.g.

Note:
It is important to be clear on whether interest is to be written off or reversed, as the selection of the transaction type used will determine what occurs to the interest
  1. Ensure that the transaction types LndInd is set to post to the current balance
  2. To write off interest the PstIntChg Flag should show as set to 'No'
  3. To reverse interest the PstIntChg Flag should show as set to 'Yes'
E.g



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