WizCount can be used to perform Interest Calculations. Interest is calculated using the conventional method of used in banking. Set the Frame Line (Credit Frame) and then define the % interest for amounts below that frame, and a higher % interest for amounts exceeding it. Credit Interest can also be calculated in the same way. This report is usually used to calculate interest received from customers (or loss of income due to late payment). The report can also be used to calculate Credit Interest for vendors or to check the calculation of interest in the Bank Statement (see more information below).
From: You can use WizCount to perform Interest Calculation not only according to the customer’s (or vendor’s) accounting balances, but also to check the bank’s interest calculation. If the Bank option is selected in this section, the calculation will be done according to the Bank Statements data. The % interest and credit frame, as stipulated in the agreement with the bank, should be recorded below.
Update Account Card: Update one of the Additional Amount fields on the Account Card with the Interest Calculation result.
Shortened Format: Display the interest calculation for each account in a single line. (Without listing Account Balances by Due Dates)
Interest %: Record the daily or annual interest %. If an Exceptional Interest Rate % is recorded, the credit frame must also be recorded. Credit Interest rates may be recorded in the same way.
As previously mentioned, interest is calculated in the method used by banks. To calculate compound interest, a Journal Entry for the interest must be recorded. For example, the interest rate for a particular customer in January is 100 NIS. A Transaction of this amount is recorded to the customer’s debit and credit (income from interest). In the next month, the customer balance will include this charge.
Tip: An interest calculation report can be used to calculate how much the business has “lost” as a result of late payments by a particular customer. When a customer fails to pay on time, they are in fact taking a loan from the vendor. An Interest Calculation report calculates the cost of that loan.