Concept on interest payment in AR

Hi Gurus,
Can you please explain the concept of interest payment in Accounts Receivable and what the documents to be configure for the same.
Regards,
Praveen.

All the configuration nodes are under SPRO -> SAP Reference IMG (F5) -> Financial Accounting -> AR and AP -> Business Transactions -> Interest Calculation. Read the IMG activity documentation adjacent to these nodes. Also read the SAP help in the following link (click on Interest Calculation in the tree to the left).
http://help.sap.com/saphelp_erp60_sp/helpdata/en/41/37b8e7455b11d182b40000e829fbfe/frameset.htm

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Interest Payments on Security Deposits

Hi ,
Can anyone help me on how withholding tax is handled in interest payments on security deposits to the customers ? What are the transactions and configurations required..
thanks ,
Amit

Hi Amit,
Go to Transaction Code-FQI9.(Posting Area-1086)
In this T.code, you assign withholding tax codes and country keys to main and sub-transactions. This means that the appropriate main and sub-transaction is written in the withholding tax line of every interest document.
Thanks,
Amlan

Scheduled interest payment in error

We have a security that matured last October but shows a scheduled interest payment for one days interest; this interest payment is an error. The class was set up incorrectly. I can adjust the class by adding a new condition with the correct dates, which results in the correct cash flow. But how do I eliminate the scheduled interest payment? Thank you.

Hello,
Please review KBA:
1938852 How to update planned records.
B) Transaction FWUP is the same for security positions (you can use
transaction TPM40, click "Menu-> Cash flow -> Recalculate" to test the
outcome before running FWUP).
Hope this helps.
Best regards,
Jasmine

Calculation of Interest on overdue witholding taxes

In my scenario the interest needs to be calculated on the overdue payments that have not yet been paid by the client to the goverment of TDS so deducted by the system. The interest needs to be calculated from the 7th of next month till date the amount is actually paid. The tds so deducted in the period 1-7th of the month will not be liable for interest calculation. Again in the next month the same cycle needs to be repeated for interest calculation.
Can anyone help me out if how to achieve the same.
Regards,
Anurag Gupta

Hi
You may like to check the config from the below angles :
1) interest payment is produced if the credit interest (because of interest calculated on items paid before the due date) is greater than the debit interest.
2) Calculate interest on items paid before due date
Indicator which means that credit interest is calculated for items paid prior to their due date, provided that the item paid was not subject to a cash discount. Interest is calculated using credit interest rates.
Note
The system calculates credit interest only on those clearing transactions where all payments were made before the due date. If you do not select this option for those transactions then the items are ignored.
This option has no effect in the case of clearing transactions where payments are made both before and after the due date. For transactions such as these, interest is always calculated on the basis of debit interest.
For partial payments and down payment offsetting items that are made before the due date of the invoice, interest is calculated from the document date if this indicator is set. If it is not set, interest is calculated from the due date of the invoice.
3) Calculate Interest as of Due Date for Net Payment
Indicator which means that interest is calculated as of the due date for net payment; otherwise, you pay interest as of the settlement period lower limit (if the due date for net payment is before it) or as of the date of the last (according to the master record) interest caluclation (if the corresponding parameter is set).
Regards
S

Calculation of Interest on Security Deposits Maintained with Vendors

Hi Friends,
We have some problem on Line Item Interest calculation.
We want to calculate Interest on Security Deposits(Spl GL) given to Vendors.
There is no Interest on Normal Items.
When we run Interest (f.47) it not calculating on cleared items eventhough we select interest for all items.
Example:
We paid Deposit on 01.01.2007 an amount of $10000
We recieved back total amount of Deposit($10000) on 15.02.2007
and when we run interest run (f.47) its not calculating any interest.
But we want to calculate interest for the period the deposit outstanding i.e. from 01.01.2007 to 14.02.2007.
Can any one help us in this regards,
Thanks in Advance,
Purnachandra RM
null

Hi
You may like to check the config from the below angles :
1) interest payment is produced if the credit interest (because of interest calculated on items paid before the due date) is greater than the debit interest.
2) Calculate interest on items paid before due date
Indicator which means that credit interest is calculated for items paid prior to their due date, provided that the item paid was not subject to a cash discount. Interest is calculated using credit interest rates.
Note
The system calculates credit interest only on those clearing transactions where all payments were made before the due date. If you do not select this option for those transactions then the items are ignored.
This option has no effect in the case of clearing transactions where payments are made both before and after the due date. For transactions such as these, interest is always calculated on the basis of debit interest.
For partial payments and down payment offsetting items that are made before the due date of the invoice, interest is calculated from the document date if this indicator is set. If it is not set, interest is calculated from the due date of the invoice.
3) Calculate Interest as of Due Date for Net Payment
Indicator which means that interest is calculated as of the due date for net payment; otherwise, you pay interest as of the settlement period lower limit (if the due date for net payment is before it) or as of the date of the last (according to the master record) interest caluclation (if the corresponding parameter is set).
Regards
S

TRM: doubts in interest rate instrument and Business partner

Dear all,
While implementing Treasury Risk Management, in order to fulfill my clientsu2019 needs I have three questions regarding, 1. Interest rate instruments, 2.Leasings and 3.Business partners.
1.When creating a contract of an interest rate instrument , associated to a floating interest rate (e.g. EURIBOR 3M), how can I calculate the tax stamp which represents 4% of my interest rate amount, and occurs every time I have to pay interests?
I could define it in the u201Cother flowsu201D label but since the contract is associated to a variable, I never know how much my 4% of tax stamp calculated over the interest amount will represent.
2.When creating leasing contracts, how can I calculate the VAT associated to the periodic payments?
3.Is there any way to make postings to a business partner directly as a Vendor or a costumer?
Thanks in advance,
Regards,
Daniel

Hi,
Please consider following:
1. Generally TDS flows are generated automatically by system based on a revenue/expense flow. By configuring Derived FLows in system you can achieve this. Then alongwith every interest payment flow a TDS flow also will be generated based on the rate defined in system with seperate flow type, you can define account posting in spro.
The path for config- TRM-Trans Mgr- Money Market-Transaction Mgt- Flow Types- Derived FLows
2. Again since VAT is a derived flow for an actual cash flow, so you can achive this through derived flows config.
3. You can make posting to Business Partner account by performing following:
a. In master data, assign role of Customer to the Business Partner
b. Make payment settings in transaction to Customer and select payee/counterparty. While posting with TBB1, entries will be against Customer A/c and further clearing will be reqd at customer level against respective payment bank.
c. To achieve this output, you may require to define account determination accordingly for customers.
I suggest to post seperate thread for each issue rather than posting with single thread for better response.
Regards
Prasad AV

House bank account determination error in interest rate instrument posting

Dear Gurus,
In IRI client pay each interest flow (1200 condition) from a different bank.This is because client do a payment as per the availability of the funds in his house banks. So every month I create a new payment detail with the payment date of the interest as the validity date with a different house bank and post each flow in TBB1 on the due date. This is working fine for the last but one payment. As usual I give a different house bank and date for the last interest payment which is due on the same day as final payment(1120 condition). When I try to post this flow I am getting error message only for flow type 1120 that "Account Determination: House Bank or House Bank account is not entered". Both the flows are due on same day but both have different flow types and bank. Is this a limitation or I need to do something?
Any help is appreciated.
Regards
Komal

Komal,
You can have separate bank details for each flow type. Try to create a separate one for flow 1120 and 1200 for the last validity date and then post. Let me know whether you still get the error.
Kalyan

Error While Running the Interest Calculation in tcode FINT

Dear All,
I have configured Item Interest Calculaiton for SPL GL Transactions for Customers like "Advances to Customer" , Here once certain period is exceeded for receiving goods from customers interest to be received from customers .. pls notice that here we routed customers as vendors also.
Intially i configure for Interest Payment ..later i changed configuration settings for interest receipt ..mean wihile i had to change GL accounts for interest receipt and others too.
Now the problem is System is calculating itnerest perfectly ..but along with that it is givign the following error in another screen.
pls see the error msg
"Account symbol 0002 cannot be replaced (modif. + )
Message no. F8107
Diagnosis
The account symbol 0002 could not be replaced by a G/L account.
During replacement of the account symbol, a step by step masking of the modification keys is carried out with unsuccessful attempts, providing this is possible. The values + specified here correspond to those of the last read attempt.
Procedure
Check whether a replacement rule is specified for masked modification keys ("+")."
pls guide me in this regard,
Shashi Kanth Reddy

Hi,
Usually the reason for the error message is that for your
Chart of Accounts there is no Account Symbol 0002 maintained.
If you compare with Chart of Accounts "INT", you will see the entry
missing.
Please maintain it accordingly by transaction OBV1 and test again.
You have to create the account symbol 0002 in your chart of accounts.
If you need that the posting is done to the customer account, then you
should create an entry as follows:
Acct symbol Currency G/L account
0002 + +
When you call transaction OBV1 and select Accounts button,
you will see that, for each account symbol, there must be a G/L account
associated with that.
BR,
Monika

Down Payment Chain

Hi All
Wanted to understand the concept of Down payment chain in SAP... Its use and significance.. Any documents/links other than SAP help would be helpful please.
Regards
Prasanna

Dear Prasanna,
I the Down Payment Chains application is
released only for Germany so far. Please see note 1021741 for more details.
This because SAP cannot guarantee that the application meets legal
requirements in other countries.
The Down Payment Chains were developed to meet the business requirements
of German construction companies. It is currently only released for
this country we know exactly the business requirements
for the following issues:
1. Special tax regulations for construction companies, for example
Down Payment Chains are subject to deferred tax for the construction
industry in Germany
2. We know how different kind of retentions are handled in this country
(security, special retentions and guarantee retentions)
3. Down Payment Chains are subject to a specific form of witholding tax
4. And a few other things
It is also important to mention that there is no MM integration. You
can only save the purchase order number in a down payment chains but
there is no functionality behind. In other words, at current the
application is an entire FI/CO/PS solution. Any possible MM integration
could only be realised as a Customer Development Project.
I hope this can help You.
Mauri

Interest frequency of Additional Details in Oracle Treasury Transaction

Dear all,
We are using Oracle Treasury. Our client request to input the time deposit with interest payment period so that the system can generate the interest payment per frequency. i.e. a 2 year time deposit with annual interest payment.
We found that there is a field "Interest Frequency" of additional details in Short Term Money's transaction form.
We try to update the value but it is not effect on calculation of interest rate.
Please advise
1. The use of Interest frequency of Additional Details.
If it is only reference field?
2. how the system can generate interest payment per term period
Regards,
Queenie

Hi,
Can you please elaborate more on your requirement.
In the FI document, you will not contain the transaction type value filled because not all documents arising from Treasury need to have the transaction type. There may be derived documents also. Same is the case for flow types. For derived documents, you will not have any flow type. But all these document line items will have update type in their item text as default.
For documents relating to transaction types, contract number will be filled, which is the treasury transaction number. Using this you can pick the transaction type from the table VTBFHA.
Regards,
Ravi

Interest splitting method and self withholding tax......

hi all,
please let me know the concept for interest splitting method with examples and also self withholding tax.
thanks in advance

please update me for this issue.........

Error when trying to post interest using FNM1 in Loan Module

Hi,
I am getting error "50 E INTEREST EXP or ZBA CONTRA ACCT cannot be replaced' when positng the interest payment for loan in loan module. The system has posted a planned record and i see it in the cash flow however when posting the planned record it is giving the above error.
Your inputs are greatly appreciated.

check loan posting scheme here:
Spro - SAP Banking - Loans management - Functions - Accounting - Define account determination
Check posting category against debit/credit posting codes and linked GL accounts for your account symbols or post here what you have defined and I couldl see what the problem is

Deferred Interest Charge

I am absolutely livid about the deferred interest charges. I set up auto-pay as soon as I purchased a Samsung television after taking advantage of the 36-month, 0% interest promotion. I set the monthly amount at well over what would be required to pay off the balance prior to the expiration of the promotion. However, because of the way my payments were allocated, there was a balance left at the end of the promotion. Because I had set up auto-pay and did not receive paper statements, I didn't realize there was a balance until I decided to take a look at what I owed back in January. I was floored when I saw a $2,500 interest payment on the statement. I called to discuss this issue and offered to pay the balance in full minus the interest charge. I felt that this was reasonable as the promotion had expired only a month prior to my phone call to Best Buy. The lady I spoke with said she could not take the interest charge off. I told her that I was perfectly capable of paying the entire balance (minus the interest charge) right there on the phone with her and that, if she wasn't able/willing to work with me at all, I would have no reason to keep my Best Buy credit card active. Why would I want to do business with a company that doesn't care to work with me, especially considering the amount of money I had spent on that card (even without the interest charge!)? She was still unwilling to work with me, so I ended up canceling my card. This was quite a poor decision on Best Buy's part as I had made a number of purchases on the card and planned to do so in the future. I studied each of the statements from the prior year carefully and could not figure out how in the world the payments were being allocated. Even though my monthly payment stayed the same, the amount allocated to the television changed every month. This is without my making any additional charges to the card. Some months, the amount allocated was more than sufficient to cover what would have been necessary to pay the balance in time. Other months, almost nothing was allocated toward the television. It made no sense. I spoke with Citibank and they were not cooperative either. I'm hoping that Best Buy will work with me on this issue before the expiration of my next promotion that I took advantage of on another large purchase. If Best Buy is not able to work with me, I will be forced to transfer the balance to another card so I don't incur even more deferred interest charges. There is no way I could make sufficient monthly payments to cover the interest that was put on the card plus the balance of the purchase I made on the other promotion before that promotion expires in July. If this issue gets resolved, I would gladly re-open an account with Best Buy. However, at this time, I have no reason to do business with a company that doesn't want to take care of its customers. Yes, I understand that there are certain terms and conditions with which the credit card holder is to comply, but this is also a situation that could be remedied while maintaining customer satisfaction. We shall see.

I would suggest to ALLWAYS look at your statements, whether you get one by mail or whether they are electronic.
Also, Best Buy doesn't make any decisions as to whether they'll remove interest charges. Citibank owns your card and only they have the power and authority to do this. Best Buy moderators on here may be able to talk to Citibank on your behalf to see whether they'll remove it, but since Best Buy doesn't own your credit card account, they have no legal authority to do anything else.
As to how payments are allocated. After the minimum payment has been paid each month, any additional payments will be allocated to the purchase with the highest amount of interest accruing and then once that is paid down, additional payments to the next highest interest purchase. Deferred interest is seen as 0 accrues interest since it will cost you zero interest if paid off according to the terms so additional payments don't get added to it until other interest bearing purchases have been paid off.
This sounds really bad and malicious, but in reality, the Federal Government decided that this is how payments will be allocated via the CARD Acr of 2009. Citibank is merely following federal law on how they allocate payments. You can change this by contacting the bank during your deferred interest period and telling them how you want it allocated, but per the law, you must initiate that contact.
Hope this helps explain how the payments are allocated. It makes it harder for deferred interest plans, especially when you make other purchases with the card that bear interest. But that's the way the federal government decided banks had to allocate payments.

TDS Interest

Dear All
Please advise me on below requirement.
The vendor (***)has exemption for INTEREST TDS 194A but has no exemption for 194J. By maintaining exemption settings in vendor master, it is applying to both 194A and 194J..
How can I achieve the following scenario :
No TDS under 194A for Interest payments
100% TDS Base Amount under 194J for Prof Cons payments
Regards
Sunny

Hi,
In the company code data against the customer, you have assaigned the tax code and type or not. If not please assaign the right code and type you created for tds on interest.
I hope it will solve your issue.
Regards.

Loans Management in FS-CM module

Hi
Can some one provide the details on how to configure the settings for calculating interest on diminishing principal. The concept is similar to EMI.
Regards,
Radhika

All,
I am implementing Loans Mgt for the first time and need some instructiong on configuring the correct condition / flow types for calculating interest on dimishing principal. My cash flow should refect 1 interest and 1 principal payment each year
over a 15 year term.
The interest rate of 6% is applied against the net value of the loan beginning in year 2 and for each subsequent year. the first year the customer does not have to pay any interest, The year 1 payment is applied against the principal. In theory the interest payment should decrease each year and the principle payment should increase each year.
My customer assesses their customer a specific amount and applies a constant factor (.09335108 * 8804 = 821.86) this principal amount is spread over a 15 year life. the customer has 30 days from invoice date to pay or another 15% is applied to the delinquent amount. My customer is on release ECC 6.0,
Any guidance, help will be greatly appreciated
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