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Interest Day and Month Calculated

Posted on by 175

I have asked this question before but continue to have problem how  interest for days and month are calculated.  For example my calculation for an invoice listed below  and D365

DateInterest dateInvoice amountAmount of interestDaysDescriptionDue dateDate Interest report My interest calculation 

8/15/2019 8/16/2019 423.00 58.88 232 Interest value 1.80 % per 1 Day is used. 9/14/2019 04/03/20 -202
9/30/2019 10/1/2019 2,149.11 239.84 186 Interest value 1.80 % per 1 Day is used. 10/30/2019 04/03/20 -156
11/7/2019 11/8/2019 776.00 68.91 148 Interest value 1.80 % per 1 Day is used. 12/7/2019 04/03/20 -118

I calculated days as 202 which includes the due date and the date the interest  was calculated but D365 calculated days as 232.  Please explain.  Thank you

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  • MATTGUO Profile Picture
    MATTGUO 22,296 on at
    RE: Interest Day and Month Calculated

    System calculates daily rate, 30 is a fixed number of days, regardless of this month is 28,29,30,31days. Daily rate = Monthly interest / 30.

  • Sylvia Dixon Profile Picture
    Sylvia Dixon 175 on at
    RE: Interest Day and Month Calculated

    Mattguo,

    What does the interest for partial months is calculated at a rate of 1/30 of the monthly interest for each day.  Is the 1 represents the first day  and the 30 represents your formula?

  • Sylvia Dixon Profile Picture
    Sylvia Dixon 175 on at
    RE: Interest Day and Month Calculated

    I have to explain to my  management team how the interest formulas work  and  I am struggling with this.

  • MATTGUO Profile Picture
    MATTGUO 22,296 on at
    RE: Interest Day and Month Calculated

    Morning Sylvia,

    It is standard formula for your case.

    What exactly requirement or result do you want?

  • Sylvia Dixon Profile Picture
    Sylvia Dixon 175 on at
    RE: Interest Day and Month Calculated

    Hi Mattguo,  Is this a standard calculation  formula? The Microsoft D365 states the following

    alculate interest each day. Interest for partial months is calculated at a rate of 1/30 of the monthly interest for each day.

  • Sylvia Dixon Profile Picture
    Sylvia Dixon 175 on at
    RE: Interest Day and Month Calculated

    Hi Mattguo,  is the (0.017/30) = to 0.000566667 a day interest charge?

  • MATTGUO Profile Picture
    MATTGUO 22,296 on at
    RE: Interest Day and Month Calculated

    The calculation is 641*244*(0.017/30) for the first line, the 30 is not payment term, it is just the fixed formula.

    Hope you can understand.

    Please refer to official document: docs.microsoft.com/.../interest-setup-form

  • Sylvia Dixon Profile Picture
    Sylvia Dixon 175 on at
    RE: Interest Day and Month Calculated

    Hi Mattguo,

    So the interest calculation doesn't look at  terms only to count the invoice due date?  Could you let me know if my interest  calculation is correct. because I thought it look at the payment terms,  How would I explain this 

    Date Interest date Days Terms Amt of Inv  Interest % amt of interest  interest cal
    6/7/2019 8/7/2019 244 30 641.00 1.70% 11 88.63
    7/25/2019 9/24/2019 196 30 35.00 1.70% 1 3.89
  • MATTGUO Profile Picture
    MATTGUO 22,296 on at
    RE: Interest Day and Month Calculated

    Hi Sylvia,

    The interest calculation doesn't look at terms only to count the invoice due date.

    Do you check the result on your previous post: community.dynamics.com/.../how-is-interest-calculated-by-month-and-day

    Day: calculate interest each day; interest for partial months is calculated at a rate of 1/30 of the monthly interest for each day.

  • Sylvia Dixon Profile Picture
    Sylvia Dixon 175 on at
    RE: Interest Day and Month Calculated

    Hi Mattguo,

    So the interest calculation doesn't look at  terms only to count the invoice due date?  Could you let me know if my interest  calculation is correct. because I thought it look at the payment terms,  How would I explain this 

    Date Interest date Days Terms Amt of Inv  Interest % amt of interest  interest cal
    6/7/2019 8/7/2019 244 30 641.00 1.70% 11 88.63
    7/25/2019 9/24/2019 196 30 35.00 1.70% 1 3.89

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