The advanced parameters are used when interest rates change periodically. Number of days, balance type, and applicable from date to be considered for interest calculation can be configured using advanced parameters.
To enable advanced parameters
1. Go to Gateway of Tally > F11: Features > Accounting Features
2. Set Activate interest calculation? to Yes.
3. Set Use advanced parameters? to Yes.
4. Press Ctrl+A to accept the changes.
To set advanced configuration for a party
1. In the party ledger master set Calculate Interest Transaction-by-Transaction? to Yes to calculate interest for each transaction.
2. Set Override Parameters for each Transaction? to Yes to display the Interest Parameters screen while recording the transaction. The defined parameters can be modified during voucher entry.
3. Set Override advanced parameters? to Yes.
4. Enter the Rate of interest.
5. Select the Interest Style, as required. The rate of interest will be calculated on the basis of the interest style applied.
6. Select the balance on which the interest has to be calculated. Interest can be calculated on credit balance, debit balance or both credit and debit balances.
7. Select the Applicability of the interest as required. If Past Due Date is selected, then the number of days after which interest has to be applied can be specified.
8. Select the date from which interest is applicable in the Calculate From field.
9. Select the rounding method applicable in the Rounding field. Select Not Applicable for saving values as is without rounding off.
10. Define multiple slabs with different rates and applicability.
The Interest Parameters screen with multiple slabs appears as shown below:
11. Press Ctrl+A to accept the configuration.
12. Press Ctrl+A to save the ledger.
In case of the above configuration, interest will be calculated at 5% starting from 10th day after due date and at 10% starting from 60th day after due date. Similarly, multiple slabs can be configured with different interest style, applicability, calculate from and rounding.
To view the report on Outstanding balances
1. Go to Gateway of Tally > Display > Statements of Accounts > Interest Calculations > Ledgers
2. Select the required ledger. The Ledger Interest report appears as shown below:
3. Click F1: Detailed to view the calculation and period.
Note: In case if part of the amount is settled, the interest is calculated on the remaining balance.