ACCOUNTS - Late Payment Interest Settings

Charge Late Payment Interest? – Select ‘Yes’ if you wish to charge LPI. Select ‘No’ if you are NOT charging LPI.

First LPI Assessment Start Date – This is the Start Date that LPI will be calculated from.

If you are just starting to use Strataboss, and if you have been charging LPI in your previous system, and wish to continue charging LPI in Strataboss, you may set  First LPI Assessment Start Date as the day after the last LPI assessment date from your previous system. For example, if in your previous system, LPI was assessed up to 30 Sep 20XX, then in Strataboss you may set 1 Oct 20XX as First LPI Assessment Start Date.

If you were not charging LPI previously and intend to start charging LPI at a specific date, then you may set First LPI Assessment Start Date at the date that you wish to start charging LPI.

Example of How ‘First LPI Assessment Start Date’ affects LPI Calculation:

Invoice Item Amount:                         100.00

Invoice Item Date:                              1 Jan 2021

Payment Term:                                   14 Days

Invoice Item Due Date:                       15 Jan 2021

Grace Period:                                      0 Days

Rate Per Annum:                                10%

LPI Assessment Date:                         31 Mar 2021

Example A

If First LPI Assessment Start Date:      1 Jan 2021

LPI Assessment on 31 Mar 2021 will be as follows:

100  X  10% / 365 days  X 76 days  = 2.08

Example B

If First LPI Assessment Start Date:      1 Feb 2021

LPI Assessment on 31 Mar 2021 will be as follows:

100  X  10% / 365 days  X 59 days  = 1.62

Example C

If First LPI Assessment Start Date:      1 Mar 2021

LPI Assessment on 31 Mar 2021 will be as follows:

100  X  10% / 365 days  X 31 days  = 0.85

LPI Account – This is the account that be credited in the creation of LPI invoice items.

Tax Code – You made set the Tax Code to be used in the creation of LPI invoice items.

Invoice Item Description Prefix – This will be used in the creation of LPI invoice items.

Example of Assessment up to 31 Mar 2021:

If this is set as ‘Late Payment Interest’, the Invoice Item’s Description will be:

Late Payment Interest - 31 Mar 2021

If this is set as ‘Late Fee’, the Invoice Item’s Description will be:

Late Fee - 31 Mar 2021

Grace Amount – The default Grace Amount is 0.00, which means that LPI invoice will be created if LPI amount is more than 0.00. This function may be used to prevent the generation of LPI amounts that you may deem too small. LPI amount must be greater than Grace Amt for an LPI invoice to be created. If LPI is equal to or below the Grace Amount, LPI invoice will NOT be created. For example, if you set Grace Amount at 0.49, LPI invoice will only be created if LPI amount if more than 0.49. (i.e. 0.50 onwards).

Type of Charges to Charge LPI – LPI will be charged on overdue amounts of items of the accounts in Box B.