If your organization charges interest on past-due accounts, this feature enables you to set up how interest will accrue. (A "past-due" account is defined as any account with a debit account balance. It is assumed that if you choose to use this feature, dues accounts will be considered "current" whenever the account has a zero balance or a credit balance (indicating an over payment for example).
An interest setting is tied to a particular membership status so you can charge different interest rates for different membership types. Perhaps an active member would be charged interest at a rate of 5% annually, but an inactive member would only be charged 2% because it isn't as important that they keep their account current. One interest setting can be defined per status.
Working with Status Interest Charges
1.On the Home ribbon, choose Lists from the Settings section.
1.On the System Lists window, expand the Statuses section.
2.Choose Interest Charges.
3.The following fields are available:
•Status - the status to which the interest settings will apply. Once set, this field cannot be changed.
•Posting Type - the (dues) posting type that should be used when the system posts automatic interest charges. Only debit action posting types are available.
•Annual Pct Rate (APR) - the annual percentage rate for the interest charges. This value will be used to determine the actual rate applied for the compounding period. Enter the actual percentage, i.e., for 9.5%, enter 9.5 not .095.
•Compounding Period - interest is calculated based on the compounding period as follows:
oDaily: ((APR / 100) / 365) x (outstanding balance)
oMonthly: ((APR / 100) / 12) x (outstanding balance)
oYearly: (APR / 100) x (outstanding balance)
•Accrual Date (ON) - the field displayed to the right of the compounding period and varies based on the selected Compounding Period:
oDaily Compounding: this field is not used, because a daily compounding means all days.
oMonthly Compounding: this field enables you to enter the day of the month on which charges should be posted. The default is the first day of the month.
oYearly Compounding: this field enables you to enter the month and day on which charges should be posted.
•Minimum Charge - the minimum charge to apply whenever interest is applicable. For example, you may charge 5% interest, with a minimum of $10.00 due whenever an account is outstanding. In this case, if the interest due is $7.50, the system would post $10.00 instead.
•Comments - any comments that should appear in the interest posting comments field.
•Last Post - the last date interest charges of this type were posted to an account.
•Last Check - the date on which the system will next check for charges to be posted. This is the date through which interest charges on this status should be considered to be current. This field defaults to the current date when a new setting is created. If you want the system to go back and post interest beginning at an earlier date, change this value to a date in the past. Likewise, if you don't want interest posting to begin until a future date, enter a future date.
Be very careful about entering a date in the past! If, for example, you enter a date a year in the past, the system will begin at that date and will check every membership record of the selected status for every missed compounding period and post interest appropriately until the account is current.