Setup of Payment Plan Finance Charges
If your organization has a different finance charge percentage for payment
plans than for regular statement balances, you must specify the percentage
on the Payment Plan Control table. If you want to assess the finance charge
on the payment plan balance rather than on the subsidiary balance, you
must set up the Payment Plan Control table.
Use the Payment Plan Control
window to define the percentage rate and how the charge will be calculated.
· Type the annual percentage
rate for each payment plan in the column called Finance Charge Percentage.
· You can base the Finance
Charge Percentage on the Subsidiary Balance or the Payment
Plan Balance. Select the appropriate radio button in the Balance
for Finance Charge group box.
The following formula is used to calculate the amount of the payment
plan finance charge based on the Payment Plan Balance:
Finance charge = (Finance charge percent
from the Payment plan control table / 365.25 days in a year) *(Period
End date from the SBS control table - Last statement date from
individuals AR SBS master table) *[Payment plan balance - (Current
payments + Other credits )]
Finance charge = (Fin chg % / 365.25) * (Per
end dt - Last stmt dt) * [Pmt plan bal - (Curr pmts + Other Credits)]
|
If
your policy is to base the finance charge on the entire amount
that the individual owes, which is the subsidiary balance, then
the payment plan would be defined as follows:
Payment Plan Code: P1 Description: Ten payments
plan
Finance Charge Percentage 15.00 Finance Charge
Balance: Subsidiary Balance
Month 1 |
Month 2 |
Month 3 |
Month 4 |
Month 5 |
Month 6 |
Month 7 |
Month 8 |
Month 9 |
Month 10 |
Month 11 |
Month 12 |
10.00 |
10.00 |
10.00 |
10.00 |
10.00 |
10.00 |
10.00 |
10.00 |
10.00 |
10.00 |
|
|
|
The following formula is used to calculate the amount of the payment
plan finance charge based on the subsidiary balance:
Finance charge = (Finance charge percent
from the Payment plan control table / 365.25 days in a year) *(Period
End date from the SBS control table - Last statement date from
individual's AR SBS master table) *[Statement balance - (Current
payments + Other credits )]
Finance charge = (Fin chg % / 365.25) * (Per
end dt - Last stmt dt) * [Subsid bal - (Curr pmts + Other Credits)]