How to do Interest calculation In tally
How to do Interest calculation In tally : In tally Interest is a legitimate return on money invested and changeable in the business world on loan and also on delayed payment.
let’s take an example Sahil enterprise sold goods to Avinash Trader on credit on 1 April 2015 with the condition that Avinash will make a payment within 12 days otherwise interest will be charged at the rate 10% per annum. Payment made by Avinash trader is on 1 may 2015 now cha
- To ActiVate Interest Calculation in Tally F11 : Features > F1 : Accounting Features “
- Activate Interest calculation ” set to Yes
- (Used Advance parameter ) Set to Yes.
- also use debit/credit notes YES
- Use Invoice mode for credit notes : YES
- Use Invoice mode for debt notes : YES
- Create ledger of A Ltd Go to Gateway of Tally >Accounting Info > Ledger > Single Ledger > Create Leger Avinash trader (Sundry debtor)
- Activate Interest calculation Yes
- Then Interest calculation : Yes
- Default credit period : 12 days
- the interest calculation Subscreen Appear Fill up The detail Calculate
now go to sales voucher
In interest calculation screen
- calculate interest transaction by transaction set to : YES
- Override parameter for each transaction set to : YES
- Override advance parameter set to : No
- rate : 10% per 365 days on Debit balances only
- Applicability : past due date : calculate from due date of invoice
Now on 1 April 2015 purchase 10 nos computer rs 20000 for cash and sold to Aviansh for 3 nos of computer for 25000o each on credit.
Make an entry of the transaction in Purchase Voucher
- Go to Gateway of Tally > Accounting Voucher > F9 Purchase
- Press F2 to change date
- In supplier invoice number write no
- In the field of party select cash from the list of ledger.
- In the field of name of item select computer
Now on the same day sold goods to Avinash trader on credit.1 computer @ 25000 each.
Receipt cash from Avinash trader on 1 may 2015
- Go to gateway of tally > Accounting vouchers >press F6(receipt)
- now in the credit side select aviansh trader and in the amount field type the amount to be received and a new screen display type of ref : agst ref : select the bill number
- Now in the debit side select Cash
- Ctrl + A to save the entry
- Now to see interest receivable amount
- Go to gateway of tally > Display statement of accounts interest calculation > interest receivable > Alt F2 to change date now you can see the interest receivable from debtor if payment is received on 1 may
- now go to gateway of tally > F11> F1 > set Use debit note credit note :YES
- Use invoice mode for debit note : YES
- now go to gateway of tally > accounts info > voucher type and alter > debit note >alter> name of the class : interest class > use class for interest calculation set to YES
Now go to accounting voucher
Press Ctrl + F9 debit note voucher class interest class appear, select class
in the debit side select the party Avinash trader : the amount is automatically selected
- now in the credit side select to create the ledger by pressing ALT +C to create new ledger by name : Interest receivable : under the indirect income
- after passing this entry
- go accounting voucher credit Avinash trader : put the amount : select against the reference
- Debit cash account
Interest is a legitimate return on money invested and chargeable in the business world on loans and also on delay payment .Interest can be calculated on the basis of simple interest or compound Interest.
Simple Interest : This is calculated on the principle amount at a certain specified rate for a specified period.
Compound Interest : this is calculated on the principal amount + interest amount of the last year at a certain specified rate for specified period.
Mr. Adhikari sold 10 nos of cement @ 350 each bag on credit to Mr. Pawan .Now the condition that Mr. Adhikari made on the bill is that Mr. Pawan has to make payment within 10 days otherwise interest with the rate 5% will be charged and after 20 days interest @ 10% will be charged.Mr. Pawan made payment after 35 days .Now how much interest will be charged from Mr. Adhikari.
- first of all, go to the gateway of tally > F11 > F1
- Set maintain bill wise detail YES
- Set Activate interest calculation YES
- Use advance parameter set to YES
- Create ledger Mr. Pawn under sundry creditor
- Maintain bill wise detail YES
- Default Credit period 10 days
- Activate interest calculation YES
- calculate interest transaction by transaction set to YES
- Override parameter for each transaction YES
- Override advance parameter YES
- Rate 5% per 365 days on debit balance only
- Applicability past due date by 10 days calculate from due date of invoice /ref
- Rounding not applicable
- Rate 5% per 365 days on debit balance only
- Applicability past due date by 20 days calculate from due date of invoice /ref
- rounding not applicable
See Also : Multiple currency in Tally