Charging a client interest takes two settings: Portfolio Interest defines how interest is calculated, and Client Settings decides when it is actually charged.
Part 1 – Portfolio Interest
- Go to Companies, open the Clients tab and click the client's name.
- Select Portfolio Interest from the list on the left, then click Edit.
- Set Enabled to Yes and complete the fields:
- Principal – what interest is charged on: NFE, Invoice Total, Invoice Balance or Advance Amount.
- Interest Type – Flat Rate, Prime Plus, Sofr Plus or Libor Plus.
- Interest Rate (%) – the flat rate, or the margin added to the benchmark.
- Floor/Minimum – the lowest effective rate, however far the benchmark falls.
- Per – the day-count basis: 360, 365 or 366.
- Click Update to save.
Prime, SOFR and LIBOR come from Settings › System Config › Benchmark Interest Rates. Keep them current.
Part 2 – Client Settings
- On the same profile, select Client Settings and click Edit.
- Turn on Autocharge Accrued Interest.
- Set Frequency of Collection – daily, weekly or monthly.
- Click Update.
Good to know
- A client with no explicit values inherits the system default. The section says so at the top, for example "Using default settings. Autocharge: No, Frequency: MONTHLY". Blank fields do not mean nothing is happening – read that line.
- Interest only charges automatically when Autocharge is on. With it off, interest still accrues but you collect it yourself.
Related articles
- How to Manage Benchmark Interest Rates