1. Bills and Collections User Guide
  2. Automatic Processes
  3. Processes Running during Beginning of Day (BOD)
  4. Automatic Accrual of Interest

8.4.3 Automatic Accrual of Interest

While defining interest components for a billing product in the Product, ICCB details screen, you specified whether accruals need to be done for the accruable interest components. For a product, accruals should be done, then the frequency of accrual should also be specified for a product (through the Product Preferences screen, at the time of product definition).

This function when running as part of the batch process run at EOD calculates the accrual amount and passes accrual accounting entries for the accruable tenor based interest components of a bill.

The Automatic Accrual function will pick up bills for processing on the following criterion:
  • Active and authorized bills which are not yet liquidated
  • Bills whose accrual date falls on the current processing date or bills whose accrual date falls between the current processing date and the next working date

The date on which accrual is due for a bill is calculated based on the accrual date and accrual frequency defined for the product associated with the bill.

When the function automatically accrues the interest components of a bill, is done the accounting entries defined for the accrual event (ACCR) are passed and the internal accounts will be updated with the accrual related details.

If the accrual date of a bill falls on a holiday, the accruals are done as per your holiday handling specifications for automatic processes, in the Branch Parameters screen.

The list of bills whose commission components were accrued is printed in the Accrual Control report.

Note:

This function will not accrue interest for bills that have moved into a user defined status for which accruals have been stopped.

Parent topic: Processes Running during Beginning of Day (BOD)