When calculating interest you can use both flat rates or rates that change over time. There are 3 types of interest rates that can be configured:
-
Fixed
A flat rate. For example you could calculate the interest owed on an invoice at a flat rate of 8% -
Variable
For example the Bank of England interest base rate, which can change monthly. -
Derived
Another example that is common is the concept of Base Rate + a specified percentage. For example: Base Rate + 4%
Modeller > Global Features > Finance > Interest Rates > Configure button
Click the Edit button to edit an existing interest rate or the + button to create a new one.
| Details | |
| System name | The system name for the interest rate. |
| Name | The name of the interest rate. |
| Rate Type |
The type of interest rate:
This cannot be changed once the interest rate is saved. |
| Enabled | Set to On to enable the use of this interest rate. |
|
Interest Rate This aspect differs dependent on the Rate Type. | |
| Fixed rate | |
| Rate | Specify the flat rate to be used. |
|
Variable rate At least one rate must be entered. Click + to create the interest rate. Every time the interest rate changes you need to add the new rate and the date it starts. | |
| Start date | The date this rate applies from. You cannot have 2 rows with the same start date. |
| Rate | Specify the interest rate. |
| Derived rate | |
| Base rate | Select the interest rate this is derived from. You must have created that rate prior to this one. For example if this was Bank of England plus 2%, you must have created the Bank of England interest rate first. |
| Rate delta | Specify the difference from the base rate. This can be a + or - interest rate. For example +2% or -1.5% of the base rate. |
Interest rates cannot be deleted if they have been used on a transaction.