Description
Per vendor account and currency, this program debits interest onarrears resulting from items that have not yet been paid or were paidtoo late. You can also create an interest payment for items paidprematurely. The letter includes the following:

• text of the letter


• item information in chosen level of detail


• an optional interest rate overview


• an interest amount overview differentiated by interest rates

There are three system variants available for calculating interest. SAPrecommends that you use these.

• Without open items

SAP&KUZI01: If you are only calculating interest on cleared items andyou will be posting the interest immediately thereafter. Interest willbe calculated for these items based on the due date for net payment.

• With open items

SAP&KUZI02: If you are calculating interest for open as well as cleareditems, and you will be posting the interest amounts immediatelythereafter. Interest is calculated for these items as of the upperlimit of the last interest calculation run.

• Without postings

SAP&KUZI03: If you do not want to post the interest. In this variant,interest is always calculated from the due date for net payment.

Precondition
You have defined an interest indicator and made all furtherspecifications for the indicator. Check whether this requirement hasbeen met. For more information, see the Financial AccountingImplementation Guide activity DefineInterest Calculation Types.
IF &DEVICE& = 'SCREEN'
Proceed
ENDIF
You have defined the form used for interest calculation. Check whetherthis requirement has been met.
If necessary, define your own forms. To do this, you can copy thestandard form, F_KUZI_01, as a reference. The text elements for theheader, footer, sender, and signature that are specified for eachcompany code in the dunning program are used in this form.
Define the names of the forms for your interest indicators. Moredocumentation is available in the Financial Accounting ImplementationGuide under Define Forms for InterestIndicators.
IF &DEVICE& = 'SCREEN'
Proceed
ENDIF
Make sure that the required interest indicator is entered in the masterrecords of the vendors who are to be included in the interestcalculation.
To post the interest, you have to define the account determination andthe document type to be used in the system settings for FinancialAccounting. You reach each entry screen in the configuration functionusing the Goto menu option.
Account determination is made using theposting interface of application"0002" (calculation of interest on arrears). The followingspecifications are required:
First, via control, you specify which account determination keys areused. You have to maintain "1000" (interest received) and "2000"(interest paid) for the account determination key "Businesstransaction". The other account determination keys are optional.
The account assignment must be completely entered on the G/L accountside (interest received or interest paid). Only the posting key isrequired for debiting and crediting the vendor account. An entry in theG/L account field of the account assignment is not relevant forvendors. Interest postings cannot be entered as noted items.
The document type for posting interest must be defined. You can findinformation on defining the document type in the Financial AccountingImplementation Guide under PrepareInterest on Arrears Calculation (Customers).
IF &DEVICE& = 'SCREEN'
Proceed
ENDIF

Output
You can create a letter with a list of items per vendor and currency.The following lists are also generated:


• account overview (optional)


• additional log (optional)


• error log (if errors occur)

Account Overview
Before actually calculating interest, you may want to have an overviewof the accounts in which interest on arrears is incurred so that youcan perhaps exclude an account from the interest calculation orcalculate interest only for certain accounts. By selecting theparameter Create account overview, you can have the program listall interest due per account and currency. The program also lists thetax codes and business areas used. If you only want to print theaccount overview and not the letter, do not select the optionCreate form
.

Additional Log
By selecting the option Create additional log you can have theprogram list the accounts and items selected and processed in thecalculation of interest on arrears. In this log, you can find out,among other things, why interest was not calculated for an account oran item. Using further parameters, you can limit the additional log tocertain accounts irrespective of the accounts selected for the interestcalculation.

Error Log
The program creates an error log if errors occur during processing. Thefollowing errors can occur, for example:


• Form not found in the language of the customer. The form languages that
are used instead are specified.

• Interest rate could not be determined because the interest rate was
defined incorrectly.

• Interest indicator not defined.

Sorting the Letters


• company code


• interest calculation indicator


• account number


• currency


• (contract number)


• main open item accounts (tax code = blank)


• special open item accounts

The items in a letter are sorted as follows:

• clearing procedure


• posting date


• document number


• line item

Interest Calculation Procedure and Specifications for InterestCalculation

Item Selection
The items for which interest is calculated are selected using thespecifications you make in the interest indicator. Before each interestcalculation, you can make further specifications using the selectioncriteria and program parameters. However, the program includes onlythose items:


• that are posted to a vendor account that has an interest calculation
indicator in its master record, and

• that are not blocked for interest calculation.

The specifications for the interest indicator are briefly explainedbelow:

• open and all cleared items

The program includes those open items that are posted up to the upperlimit of the period. Items that are posted after the upper limit of theperiod are not included. If the clearing date (posting date of theclearing) is after the upper limit of the period, the program selectsthe item as an open item.
In addition, the program selects clearing transactions that contain apayment. These are transactions in which one of the cleared items is apayment. It also includes clearing transactions that only containcredit memos and offsetting entries instead of payments.

• open items and items cleared with a payment

The program includes those open items that are posted up to the upperlimit of the period. Items that are posted after the upper limit of theperiod are not included. If the clearing date (posting date of theclearing) is after the upper limit of the period, the program selectsthe item as an open item.
In addition to the open items, the program includes only those clearingtransactions that contain a payment. This enables you to exclude theclearing transactions that only contain credit memos and offsettingentries in addition to the invoices.

• no open items - all cleared items

This option prevents open items from being selected. The program thenonly includes cleared items. The clearing date (posting date of theclearing) must be within the period of interest calculation.

• no open items - only items cleared with a payment

This option prevents open items from being selected. The programincludes only those cleared items that contain a payment. The clearingdate (posting date of the clearing) must be within the period ofinterest calculation.
The time period from the due date for net payment to the clearing dateforms the basis for calculating interest on a receivable. If theclearing document is a payment, interest is calculated up until thedocument date of the payment.
When calculating interest on down payment requests that were cleared bydown payments, the system tries to find the document date of the downpayment, and use it as the upper limit of the interest calculation. Ifthis is not possible, the program calculates interest up to theclearing date, and lists in the error log the down payment requests forwhich a down payment document was not found.
If an item is still open at the upper limit of the interest calculationperiod, the program calculates interest only up until that date. If theitem was already open at the lower limit of the interest calculationperiod, the program calculates interest from that date.
By selecting the appropriate program option, you can include the dateof the last interest calculation. After the program is executed, thedate is entered via batch input into the master records of the vendoraccounts in which interest was calculated. If you select this option,the program
does not include any cleared items with a clearing date before or onthe date of the last interest calculation
calculates interest on an open item from the date of the last interestcalculation.
Using the date of the last interest calculation enables you to preventa period from being settled twice.
Interest can be calculated from the due date for net payment. This isuseful if you are calculating interest only for cleared items. In thiscase, interest on an item is always settled after clearing. The date ofthe last interest calculation in the master record is then onlydisplayed for your information.
Further specifications for the interest indicator include thefollowing:

• Calculate interest on items paid before due date

If you select this option in the interest indicator, credit interest ischarged on the items paid prior to the due date, provided that the itemwas not paid with cash discount. Credit interest rates are used forthis.
For partial payments that are made prior to the due date of theinvoice, interest is calculated from the document date if this field isselected. If not, interest is calculated from the due date of theinvoice.

• Only calculate interest on debit items

Select this option if you do not want to calculate interest on credititems because they will, for example, produce interest that iscredited. Otherwise, a credit entry is treated in the same way as adebit entry; in particular, the same interest rate is used in theinterest calculation. Reason: if the credit memo is not immediatelyoffset with the invoice, that is, it is not cleared until later, boththe invoice and the credit memo are "overdue" and therefore balance outin terms of interest.
Note the due date for net payment: A credit memo is usually dueimmediately, unless it is a credit memo with a fixed value date or isinvoice-related. You should therefore make sure that interest is notcredited unintentionally because the due date is not the same as thedue date of the receivable.

• Tolerance days

If interest is to be calculated on an item, the program adds thetolerance days defined in the interest indicator to the due date fornet payment as long as the item was not paid (cleared) before the duedate.
If there is another period in which interest should be calculated on anitem because of the upper limit of the period or the document date ofthe clearing, the program calculates interest on the item from the duedate for net payment or from the lower limit of the interestcalculation period. Otherwise, the item is not selected.

• Transfer days

Transfer days are the days a payment may need to reach the payee fromthe payer (the processing time at the bank required for paymenttransfers, for example). The transfer days are subtracted from thedocument date of incoming payments.

Calculating the Interest and Charging it to the Account
If an item qualifies according to the above criteria for the interestcalculation, the program first calculates the number of days overduedepending on the calendar type you defined in the interest indicator.With the Gregorian or French calendar, the program calculates the exactnumber of days. If a bank calendar or the Japanese calendar isspecified, the program determines the days according to the bankcalendar. Each month in a bank calendar has 30 days.
A different number of days will be calculated for each year dependingon the type of calendar:


• 360 days for the bank calendar and French calender


• 365, or 366 if leap year is included, for the Gregorian and Japanese
calendar
You specify the calendar type in the interest indicator. You also makethe following specifications to calculate the interest:

• Use interest calculation numerators

If you select this option, the system first determines the interestcalculation numerators resulting from the amount and the days itcalculates. Otherwise, the system immediately calculates the intereston the item.

• Round-off interest calculation numerators

If you select this option, the system immediately rounds off theinterest calculation numerators it determines.

• Min/max amount and no interest payment

To determine whether an interest settlement is to be created, thesystem internally calculates interest on all items for which interestis to be calculated. If the interest amount determined for each accountand currency is less than the amount you specify as the minimum/maximumamount in the interest indicator, the interest is not charged.
If you select the option no interest payment, the system willnot create an interest settlement when the credit interest amount is atleast as much as the minimum/maximum amount.

Specifying and Determining the Interest Rate
The system usually calculates interest using the reference interestrates defined in the system. You store the interest rates under thekeys interest reference, currency and date from which theinterest rate is valid.
To determine the interest rates used for particular items, the systemuses the terms you specify in the fields Interest indicator,Currency, and Date (as of which the term is valid), aswell as a consecutive number.
The system then determines the final interest rate using the definedfunction modules (standard function modules DEBIT_INT_RATE_DETERMINE orCREDIT_INT_RATE_DETERMINE). It also adds the discount or surchargespecified in the interest indicator to the reference interest.
If the interest rates are to be determined by an external functionmodule, you must enter the name of the module in the Functionmodule field when defining the interest indicator. The transferoccurs in the subroutine INTEREST_RATES_EX, where you can also find outwhich fields are to be filled. The structure of the interest ratetable, ZSTAB, is predefined by the data dictionary structure RFDUZI10.

Form Selection
If you do not specify a form name for the interest calculation, thesystem uses the form defined in the interest indicator. The language ofthe form is the language of the recipient. If the form does not existin this language, the system uses the language in which you created theform (usually the company code language).

Taxes on Sales and Purchases for Interest
If tax on sales and purchases is to be calculated for the interest,proceed as follows:


• You can define a tax code for the interest indicator in the system. Tax
is calculated on the interest amount and displayed.

Interest Posting and Account Determination for the Interest Posting
If you select the option Post interest settlement, the systemplaces the interest postings in a batch input session.
Account determination is made using the posting interface. Forinformation on the requirements to be met for this, see the section"Requirements".