Switching Interest Type from "Compound" to "Simple"

SOLVED

We are using Sage Timeslips Premium, Build 30.0.6.110.  We currently have the interest type set to "Compound".  If we switch it to "Simple" how will this affect clients that already have past due invoices with accumulated compound interest?  Per a previous online chat I had with Sage, I understand the old past due invoices that were compound will have that incurred interest amount owed as a previous balance and any new interest that is incurred will be calculated as simple interest.  Does that mean that going forward interest on the old past due invoices will be calculated only on the fees & costs that are past due, not the past due interest that is included in the entire previous balance?

  • +1
    verified answer

    Hi  ,

    Thank you for your question about switching the interest type in Sage Timeslips Premium from "Compound" to "Simple."

    You are correct that when you switch the interest type:

    • Old past-due invoices with accumulated compound interest will retain their previously calculated interest as part of the balance owed.
    • Going forward, new interest will be calculated as simple interest based only on the past-due fees and costs, without compounding the previously accrued interest.

    Best Practice Tips for Transitioning Interest Types:

    1. Review Outstanding Balances: Before making the change, review your current outstanding balances to ensure accuracy.
    2. Communicate with Clients: Notify clients whose invoices may be affected by the switch to simple interest. Transparency helps avoid potential disputes.
    3. Testing the Settings: Use a test environment or run a trial calculation on a sample invoice to verify how the change affects interest calculations.
    4. Reference Guide: For step-by-step guidance on configuring interest types, refer to this Knowledgebase article.

    If you have any additional questions or need further assistance with the setup, feel free to reach out!

    Warm Regards,
    Erzsi