Interest Rates in Curo365, once applied to a Matter, will automatically create fees based on the rules that you set for Interest regarding Overdue Bills. Interest Rates must first be Created, then Applied, and once Interest has accrued, the fees will need to be Generated onto a Bill. Let’s get started!
Creating Interest Rates
To begin, we need to have access to the Business Centers. As always, if you don’t see the Business Center option under the Administration Subheading (or if you don’t see the Administration Subheading at all), you may not be an Admin, and you’ll either need to switch to the Admin App or you’ll need to get with an Admin to make you an Admin.
Next, select the Business Center in which you want to work. Usually, you’ll only have one.
Once in the Business Centers, scroll down until you see the area for Interest Rates. Here, you’ll see a list of currently Active Interest Rates (Interest Rates currently in use in a Matter (if any)) and the ability to Add New Interest Rates. An Active Interest Rate simply means that its been created. To create a New Interest Rate, click New Interest Configuration.
Next, we’ll need to fill out the following pieces of Data:
Name – The Name of the Interest Rate, shown on the Bill and in your Fees.
Bill Text – The Text that will appear in the Bill, seen by the Client, an explanation of the Interest Fees.
Percent – The % of the Remaining Balance of the initial Bill.
Days Past Due – Interest will start accruing this many Days after the Bill was initially Due.
Rate Period – The period in which the Interest will applied, either Monthly or Annually
*NOTE* - The Monthly or Annual charges are actually calculating a fraction based on days. So if you set it to 5% Monthly, and the first month for Interest to be applied is November, then the system will actually break the 5% into 30ths (because November has 30 days) and calculate Interest daily, giving you an accurate Interest value anytime you print a Statement or look at the PDF Preview. The same would go for annual Interest - it would cut your total % into 365ths and apply a 365th daily.
***ALSO NOTE*** - It's very important to understand that the Interest IS NOT Compounding. If you add Interest in January, that Interest is not then calculated into the whole for deciding Interest in February. Additionally, the Interest is always calculated based on the current Balance AND NOT the Principle.
Once finished, be sure to Save *and then* Activate the Interest Configuration (the Activate option will only appear *after* you Save). Even though you can still apply it to Matters without Activating it, Interest won't actually be applied to Bills during Bill Generation. So hit the Activation button at the top of the screen if you're planning on using the Interest Configuration!
*NOTE* When creating/using an Interest Rate Configuration, you'll need to be sure you also have an appropriate Payment Allocation Type in order to Allocate Payments accordingly. The new Payment Allocation Type for this must be given a Designation of Interest, and, as with all Allocation Types, it will allow you to select an Account associated with it so that you have the flexibility to use a separate Account set aside for Interest Payments. For a Guide on creating Allocation Types, click here.
Applying Created Interest Rates
Interest Rates can be applied to new or existing Matters in the General tab (default tab) for a Matter. Access your Matters on the left side of the screen, under the Matters Subheading.
Choose the Matter you want.
And scroll down to this Field, choose the Magnifying Glass to find what you need and add the Interest Rate. Likewise, when creating a brand-new Matter, you can add an Interest Rate on creation. Either way, save when finished and know that this Interest Rate will be applied when appropriate.
*NOTE* - You may have to choose Change View in order to see the Interest Rate if this is the first time that you’ve used it, as the system defaults to Active Interest Rates (and if this has never been used, it won’t be Active).
*NOTE* - An Interest Rate applied to an existing Matter with existing, overdue Bills *DOES NOT* apply Interest Fees retroactively. This feature is *ONLY* for Overdue Bills, moving forward.
Creating an Interest Bill
Interest Fees are not applied directly to the overdue Bill, but rather accrue on subsequent Bills. In other words, any time you generate a Bill, Interest Fees will be added as new items when applicable. In order to Generate the Bill for the Interest Rates, start by going to the Bills Entity under the Accounting Subheading.
Then click Generate Bills.
Once here, you’ll see a brand-new option added since we added the Interest Rates – Create fees for un-billed interest. Leaving that checked before you click OK will apply the proper Fee Codes for the Interest and ensure that they are added to the Bill.
In order to access this new Bill/the new Bills, find the initial, overdue Bill in your Bill list and select it.
Or you can simply change the View above to a new option, Bills with Interest Balance.
Then click the Related Tab and choose Interest to see the list of Interest Fees applied to this Bill. That list of Fees will also include a Bill Number, and that Bill Number is the specific Bill for the Interest Fees.
Bonus Image! This is how your Interest will appear on Bill PDF's!
For more information on Generating or what to do with created Bills, click here for a full Guide!
And as is the case with any Bill that needs to be Paid, in order to Pay the Interest Bill, you'll need to Allocate funds from a Payment. For a Guide on Payments and Allocations, click here!