Interest Calculations in Accounting (All-in-One) ERP software

Published on 22, May, 2025

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Managing outstanding balances and third-party transactions becomes far easier with the smart tools built into Accounting (All-in-One) ERP. In this guide, we’ll explore how to:

• Calculate interest using real-time data
• Use general vouchers for indirect payments
• Maintain interest-related entries like Interest Paid and Interest Receivable
• Use the dedicated interest calculator window for simple, ledger-free tracking

📊 Activate the Interest Calculator

To get started with interest calculations:

1. Launch your company in the ERP
2. Press F12 to open configuration settings
3. Enable Show Interest Calculator
4. Save and close the window

You’ll now see additional columns in ledgers showing Balance Days and Interest Amount, making overdue interest tracking automatic and precise.

💡 Real Example: Customer Interest Calculation

Let’s say a customer owes you ₹10,000 and you wish to apply 12% annual interest. With one click, the system calculates the exact day-wise interest (e.g., ₹1200) — no manual math or spreadsheet needed.

🔁 Use General Vouchers for Indirect Transactions

Sometimes a third party pays your vendor or you settle an account via another party. Here’s how to record such transactions:

• Debit: Shiv Kumar
• Credit: Indra Kumar

Enter a narration such as "Payment made by Indra Kumar to Shiv Kumar". This ensures proper accounting even in complex real-world scenarios.

💰 Record Interest Paid and Interest Received

➡️ Interest Paid:

• Debit: Interest Paid
• Credit: Shiv Kumar

This entry reflects in your Profit & Loss under Indirect Expenses.

⬅️ Interest Received:

• Debit: Ram Kumar
• Credit: Interest Receivable

This is treated as Indirect Income in your accounts.

📄 Interest Calculator Window: For Simple Use

If you're not an accountant or just want to track simple borrowing/lending without using full vouchers:

• Open the Interest Calculator window
• Enter the Date, Amount, and Optional Narration

This method is perfect for small businesses or personal use. The software tracks daily balances and shows interest amounts with precision.

🧪 Case Study: Tracking Interest with Amit Kumar

Suppose you lent ₹15,000 to Amit Kumar. After 20 days, he repays ₹5,000. The system instantly calculates how much interest he owes on the balance. You can even set the interest mode as monthly (1.5%) or yearly (18%) based on your terms.

📑 Review Saved Calculations

All interest entries are saved (when you hit on save button) in a dedicated report section where you can:

• See party-wise interest logs
• Filter by date and ledger
• Print professional interest statements

Perfect for follow-ups, audits, and business compliance.

✨ When to Use This Feature

This tool is designed for two types of users:

• Professionals & Businesses: Use full ledger and voucher-based tracking for complete P&L integration
• Individuals & Casual Users: Use calculator window for simple loan/borrow management without deep accounting

✅ Summary

• Enables exact interest tracking by day
• Handles indirect payments via General Vouchers
• Supports Interest Paid and Interest Receivable ledgers
• Offers simplified tracking via a dedicated calculator window

Accounting (All-in-One) ERP gives you the power to manage interest calculations and complex entries with clarity and ease — whether you’re a business owner or tracking personal finances.

Keep exploring our ERP’s tools, and let your accounting work smarter for you!

📺 Watch this video tutorial: Click here to watch on YouTube — and follow along to see every feature in action with real examples inside our Accounting (All-in-One) ERP software.