{"id":10968,"date":"2025-08-19T09:28:54","date_gmt":"2025-08-19T03:58:54","guid":{"rendered":"https:\/\/factech.ai\/blog\/?post_type=ufaq&#038;p=10968"},"modified":"2026-02-19T09:42:13","modified_gmt":"2026-02-19T04:12:13","slug":"what-are-different-interest-calcualtion-options-in-factech-billing-system","status":"publish","type":"ufaq","link":"https:\/\/factech.ai\/blog\/ufaqs\/what-are-different-interest-calcualtion-options-in-factech-billing-system\/","title":{"rendered":"What are different interest calcualtion options in Factech Billing System?"},"content":{"rendered":"<div  class=\"ewd-ufaq-faq-list ewd-ufaq-page-type-load_more ewd-ufaq-category-tabs- ewd-ufaq-faq-category-title-accordion\" id='ewd-ufaq-faq-list'>\n\n\t<input type='hidden' name='show_on_load' value='' id='ewd-ufaq-show-on-load' \/>\n<input type='hidden' name='include_category' value='' id='ewd-ufaq-include-category' \/>\n<input type='hidden' name='exclude_category' value='' id='ewd-ufaq-exclude-category' \/>\n<input type='hidden' name='orderby' value='date' id='ewd-ufaq-orderby' \/>\n<input type='hidden' name='order' value='desc' id='ewd-ufaq-order' \/>\n<input type='hidden' name='post_count' value='-1' id='ewd-ufaq-post-count' \/>\n<input type='hidden' name='current_url' value='\/blog\/wp-json\/wp\/v2\/ufaq\/10968' id='ewd-ufaq-current-url' \/>\n\t\n\t\n\t<div class='ewd-ufaq-faqs'>\n\n\t\t<div  class=\"ewd-ufaq-faq-div ewd-ufaq-faq-column-count-one ewd-ufaq-faq-responsive-columns- ewd-ufaq-faq-display-style-default\" id='ewd-ufaq-post-10968-yV0MFRu0RA' data-post_id='10968'>\n\n\t\t\n\t<div class='ewd-ufaq-faq-title '>\n\t\n\t<a class='ewd-ufaq-post-margin'  href='https:\/\/factech.ai\/blog\/ufaqs\/what-are-different-interest-calcualtion-options-in-factech-billing-system\/' >\n\n\t\t<div class='ewd-ufaq-post-margin-symbol ewd-ufaq-square'>\n\t\t\t<span >A<\/span>\n\t\t<\/div>\n\n\t\t<div class='ewd-ufaq-faq-title-text'>\n\n\t\t\t<h4>\n\t\t\t\tWhat are different interest calcualtion options in Factech Billing System?\t\t\t<\/h4>\n\n\t\t<\/div>\n\n\t\t<div class='ewd-ufaq-clear'><\/div>\n\n\t<\/a>\n\t\n<\/div>\n\t\n\t<div class='ewd-ufaq-faq-body' >\n\n\t\t\n\t\t\t\n\t\t\n\t\t\t<div class='ewd-ufaq-post-margin ewd-ufaq-faq-post'>\n\t<h2>Common terms (used below)<\/h2>\n<ul>\n<li><strong>Bill Date<\/strong>: The date the bill is generated.<\/li>\n<li><strong>Due Date<\/strong>: Last date to pay without interest.<\/li>\n<li><strong>Current Amount<\/strong>: This bill\u2019s charges\/taxes.<\/li>\n<li><strong>Previous Due (Arrears)<\/strong>: Unpaid from older bills.<\/li>\n<li><strong>Outstanding\/Balance<\/strong>: What\u2019s still unpaid at a point in time.<\/li>\n<li><strong>Rate<\/strong>: Interest % you set (e.g., 18% p.a.).<\/li>\n<li><strong>Factor<\/strong>: How time is counted\n<ul>\n<li><strong>By Days<\/strong>: prorated by number of days.<\/li>\n<li><strong>By Cycle\/Month<\/strong>: as full cycle\/month (no day-wise split).<\/li>\n<\/ul>\n<\/li>\n<li><strong>Minimum Amount<\/strong>: If set, interest applies only when balance &gt; this.<\/li>\n<\/ul>\n<hr \/>\n<h2>1) Interest on Unpaid Amount (from bill date)<\/h2>\n<p><strong>What it does:<\/strong> Charges interest on the total unpaid amount (previous balance adjusted for advance) starting from the <strong>new bill date<\/strong>.<br \/>\n<strong>When to use:<\/strong> You want interest for the whole cycle regardless of the due date.<br \/>\n<strong>How it works (short):<\/strong><br \/>\nInterest = (Unpaid amount) \u00d7 (Rate) \u00d7 (time factor).<br \/>\n<strong>Example:<\/strong> Bill date 1 Aug; unpaid \u20b910,000; rate 18% p.a.; time = 30 days \u2192 approx \u20b910,000 \u00d7 18% \u00d7 (30\/365) \u2248 <strong>\u20b9148<\/strong>.<\/p>\n<blockquote><p>Code paths: <code>int_on_unpaid_amount<\/code>, <code>due_on_unpaid_amount<\/code><\/p><\/blockquote>\n<hr \/>\n<h2>2) Interest after Due Date (credit on bill due date)<\/h2>\n<p><strong>What it does:<\/strong> Considers payments before\/after due date and charges interest only <strong>after<\/strong> the due date on whatever remains unpaid.<br \/>\n<strong>When to use:<\/strong> You allow a grace period till due date.<br \/>\n<strong>How it works:<\/strong><\/p>\n<ul>\n<li>Payments before due reduce principal; no interest for that period.<\/li>\n<li>From <strong>Due Date<\/strong> to payment\/next milestone, interest accrues on remaining balance.<br \/>\n<strong>Example:<\/strong> Due 15 Aug; balance \u20b910,000. Paid \u20b96,000 on 10 Aug (before due) \u2192 no interest on that part. From 16\u201331 Aug, interest on \u20b94,000 \u2192 \u20b94,000 \u00d7 18% \u00d7 (16\/365) \u2248 <strong>\u20b931<\/strong>.<\/li>\n<\/ul>\n<blockquote><p>Code paths: <code>int_credit_bill_date<\/code>, <code>int_credit_bill_due_date<\/code> (variants)<\/p><\/blockquote>\n<h3 data-start=\"155\" data-end=\"204\">Example: Interest Calculation After Due Date<\/h3>\n<h3 data-start=\"206\" data-end=\"218\">Scenario<\/h3>\n<div class=\"TyagGW_tableContainer\">\n<div class=\"group TyagGW_tableWrapper flex flex-col-reverse w-fit\">\n<div class=\"table\"><div class=\"table\"><table class=\"w-fit min-w-(--thread-content-width)\" data-start=\"220\" data-end=\"431\">\n<thead data-start=\"220\" data-end=\"236\">\n<tr data-start=\"220\" data-end=\"236\">\n<th class=\"\" data-start=\"220\" data-end=\"227\" data-col-size=\"sm\">Item<\/th>\n<th class=\"\" data-start=\"227\" data-end=\"236\" data-col-size=\"sm\">Value<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"254\" data-end=\"431\">\n<tr data-start=\"254\" data-end=\"286\">\n<td data-start=\"254\" data-end=\"271\" data-col-size=\"sm\">Last Bill Date<\/td>\n<td data-start=\"271\" data-end=\"286\" data-col-size=\"sm\">01 Jan 2026<\/td>\n<\/tr>\n<tr data-start=\"287\" data-end=\"313\">\n<td data-start=\"287\" data-end=\"298\" data-col-size=\"sm\">Due Date<\/td>\n<td data-start=\"298\" data-end=\"313\" data-col-size=\"sm\">10 Jan 2026<\/td>\n<\/tr>\n<tr data-start=\"314\" data-end=\"349\">\n<td data-start=\"314\" data-end=\"334\" data-col-size=\"sm\">Current Bill Date<\/td>\n<td data-start=\"334\" data-end=\"349\" data-col-size=\"sm\">01 Feb 2026<\/td>\n<\/tr>\n<tr data-start=\"350\" data-end=\"383\">\n<td data-start=\"350\" data-end=\"366\" data-col-size=\"sm\">Interest Rate<\/td>\n<td data-start=\"366\" data-end=\"383\" data-col-size=\"sm\">18% per annum<\/td>\n<\/tr>\n<tr data-start=\"384\" data-end=\"414\">\n<td data-start=\"384\" data-end=\"403\" data-col-size=\"sm\">Last Bill Amount<\/td>\n<td data-start=\"403\" data-end=\"414\" data-col-size=\"sm\">\u20b910,000<\/td>\n<\/tr>\n<tr data-start=\"415\" data-end=\"431\">\n<td data-start=\"415\" data-end=\"425\" data-col-size=\"sm\">Advance<\/td>\n<td data-start=\"425\" data-end=\"431\" data-col-size=\"sm\">\u20b90<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div><\/div>\n<\/div>\n<\/div>\n<hr data-start=\"433\" data-end=\"436\" \/>\n<h4 data-start=\"438\" data-end=\"457\">\ud83e\uddfe Payments Made<\/h4>\n<div class=\"TyagGW_tableContainer\">\n<div class=\"group TyagGW_tableWrapper flex flex-col-reverse w-fit\">\n<div class=\"table\"><div class=\"table\"><table class=\"w-fit min-w-(--thread-content-width)\" data-start=\"459\" data-end=\"613\">\n<thead data-start=\"459\" data-end=\"483\">\n<tr data-start=\"459\" data-end=\"483\">\n<th class=\"\" data-start=\"459\" data-end=\"466\" data-col-size=\"sm\">Date<\/th>\n<th class=\"\" data-start=\"466\" data-end=\"473\" data-col-size=\"sm\">Type<\/th>\n<th class=\"\" data-start=\"473\" data-end=\"483\" data-col-size=\"sm\">Amount<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"509\" data-end=\"613\">\n<tr data-start=\"509\" data-end=\"543\">\n<td data-start=\"509\" data-end=\"523\" data-col-size=\"sm\">05 Jan 2026<\/td>\n<td data-start=\"523\" data-end=\"533\" data-col-size=\"sm\">Payment<\/td>\n<td data-start=\"533\" data-end=\"543\" data-col-size=\"sm\">\u20b92,000<\/td>\n<\/tr>\n<tr data-start=\"544\" data-end=\"578\">\n<td data-start=\"544\" data-end=\"558\" data-col-size=\"sm\">20 Jan 2026<\/td>\n<td data-start=\"558\" data-end=\"568\" data-col-size=\"sm\">Payment<\/td>\n<td data-start=\"568\" data-end=\"578\" data-col-size=\"sm\">\u20b93,000<\/td>\n<\/tr>\n<tr data-start=\"579\" data-end=\"613\">\n<td data-start=\"579\" data-end=\"593\" data-col-size=\"sm\">28 Jan 2026<\/td>\n<td data-start=\"593\" data-end=\"603\" data-col-size=\"sm\">Payment<\/td>\n<td data-start=\"603\" data-end=\"613\" data-col-size=\"sm\">\u20b94,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div><\/div>\n<\/div>\n<\/div>\n<hr data-start=\"615\" data-end=\"618\" \/>\n<h3 data-start=\"620\" data-end=\"649\">\ud83d\udd0e Step-by-Step Calculation<\/h3>\n<hr data-start=\"651\" data-end=\"654\" \/>\n<h4 data-start=\"656\" data-end=\"682\">1\ufe0f\u20e3 Balance on Due Date<\/h4>\n<p data-start=\"684\" data-end=\"755\">Initial Bill: \u20b910,000<br data-start=\"705\" data-end=\"708\" \/>Payment on 05 Jan (before due date): \u2212 \u20b92,000<\/p>\n<p data-start=\"757\" data-end=\"801\">\ud83d\udc49 Balance on 10 Jan (Due Date) = <strong data-start=\"791\" data-end=\"801\">\u20b98,000<\/strong><\/p>\n<p data-start=\"803\" data-end=\"844\">\u26a0 No interest is applied before due date.<\/p>\n<hr data-start=\"846\" data-end=\"849\" \/>\n<h4 data-start=\"851\" data-end=\"881\">2\ufe0f\u20e3 Interest After Due Date<\/h4>\n<p data-start=\"883\" data-end=\"932\">Interest is calculated only after <strong data-start=\"917\" data-end=\"932\">10 Jan 2026<\/strong><\/p>\n<hr data-start=\"934\" data-end=\"937\" \/>\n<h5 data-start=\"939\" data-end=\"956\">\ud83d\udccd Period 1<\/h5>\n<p data-start=\"957\" data-end=\"1003\">10 Jan \u2192 20 Jan (10 days)<br data-start=\"982\" data-end=\"985\" \/>Balance = \u20b98,000<\/p>\n<p data-start=\"1005\" data-end=\"1017\">Interest =<\/p>\n<div class=\"contain-inline-size rounded-2xl corner-superellipse\/1.1 relative bg-token-sidebar-surface-primary\">\n<div class=\"sticky top-[calc(var(--sticky-padding-top)+9*var(--spacing))]\">\n<div class=\"absolute end-0 bottom-0 flex h-9 items-center pe-2\">\n<div class=\"bg-token-bg-elevated-secondary text-token-text-secondary flex items-center gap-4 rounded-sm px-2 font-sans text-xs\"><\/div>\n<\/div>\n<\/div>\n<div class=\"overflow-y-auto p-4\" dir=\"ltr\"><code class=\"whitespace-pre!\"><span class=\"hljs-number\">8000<\/span> <span class=\"hljs-string\">\u00d7<\/span> <span class=\"hljs-number\">18<\/span><span class=\"hljs-string\">%<\/span> <span class=\"hljs-string\">\u00d7<\/span> <span class=\"hljs-string\">(10<\/span> <span class=\"hljs-string\">\/<\/span> <span class=\"hljs-number\">365<\/span><span class=\"hljs-string\">)<\/span><br \/>\n<span class=\"hljs-string\">=<\/span> <span class=\"hljs-string\">\u20b939.45<\/span><br \/>\n<\/code><\/div>\n<\/div>\n<p data-start=\"1060\" data-end=\"1125\">After payment on 20 Jan:<br data-start=\"1084\" data-end=\"1087\" \/>New Balance = \u20b98,000 \u2212 \u20b93,000 = \u20b95,000<\/p>\n<hr data-start=\"1127\" data-end=\"1130\" \/>\n<h5 data-start=\"1132\" data-end=\"1149\">\ud83d\udccd Period 2<\/h5>\n<p data-start=\"1150\" data-end=\"1195\">20 Jan \u2192 28 Jan (8 days)<br data-start=\"1174\" data-end=\"1177\" \/>Balance = \u20b95,000<\/p>\n<p data-start=\"1197\" data-end=\"1207\">Interest =<\/p>\n<div class=\"contain-inline-size rounded-2xl corner-superellipse\/1.1 relative bg-token-sidebar-surface-primary\">\n<div class=\"sticky top-[calc(var(--sticky-padding-top)+9*var(--spacing))]\">\n<div class=\"absolute end-0 bottom-0 flex h-9 items-center pe-2\">\n<div class=\"bg-token-bg-elevated-secondary text-token-text-secondary flex items-center gap-4 rounded-sm px-2 font-sans text-xs\"><\/div>\n<\/div>\n<\/div>\n<div class=\"overflow-y-auto p-4\" dir=\"ltr\"><code class=\"whitespace-pre!\"><span class=\"hljs-number\">5000<\/span> <span class=\"hljs-string\">\u00d7<\/span> <span class=\"hljs-number\">18<\/span><span class=\"hljs-string\">%<\/span> <span class=\"hljs-string\">\u00d7<\/span> <span class=\"hljs-string\">(8<\/span> <span class=\"hljs-string\">\/<\/span> <span class=\"hljs-number\">365<\/span><span class=\"hljs-string\">)<\/span><br \/>\n<span class=\"hljs-string\">=<\/span> <span class=\"hljs-string\">\u20b919.73<\/span><br \/>\n<\/code><\/div>\n<\/div>\n<p data-start=\"1249\" data-end=\"1314\">After payment on 28 Jan:<br data-start=\"1273\" data-end=\"1276\" \/>New Balance = \u20b95,000 \u2212 \u20b94,000 = \u20b91,000<\/p>\n<hr data-start=\"1316\" data-end=\"1319\" \/>\n<h5 data-start=\"1321\" data-end=\"1338\">\ud83d\udccd Period 3<\/h5>\n<p data-start=\"1339\" data-end=\"1384\">28 Jan \u2192 01 Feb (4 days)<br data-start=\"1363\" data-end=\"1366\" \/>Balance = \u20b91,000<\/p>\n<p data-start=\"1386\" data-end=\"1396\">Interest =<\/p>\n<div class=\"contain-inline-size rounded-2xl corner-superellipse\/1.1 relative bg-token-sidebar-surface-primary\">\n<div class=\"sticky top-[calc(var(--sticky-padding-top)+9*var(--spacing))]\">\n<div class=\"absolute end-0 bottom-0 flex h-9 items-center pe-2\">\n<div class=\"bg-token-bg-elevated-secondary text-token-text-secondary flex items-center gap-4 rounded-sm px-2 font-sans text-xs\"><\/div>\n<\/div>\n<\/div>\n<div class=\"overflow-y-auto p-4\" dir=\"ltr\"><code class=\"whitespace-pre!\"><span class=\"hljs-number\">1000<\/span> <span class=\"hljs-string\">\u00d7<\/span> <span class=\"hljs-number\">18<\/span><span class=\"hljs-string\">%<\/span> <span class=\"hljs-string\">\u00d7<\/span> <span class=\"hljs-string\">(4<\/span> <span class=\"hljs-string\">\/<\/span> <span class=\"hljs-number\">365<\/span><span class=\"hljs-string\">)<\/span><br \/>\n<span class=\"hljs-string\">=<\/span> <span class=\"hljs-string\">\u20b91.97<\/span><br \/>\n<\/code><\/div>\n<\/div>\n<hr data-start=\"1437\" data-end=\"1440\" \/>\n<h3 data-start=\"1442\" data-end=\"1469\">\ud83d\udcb0 Total Interest Applied<\/h3>\n<div class=\"contain-inline-size rounded-2xl corner-superellipse\/1.1 relative bg-token-sidebar-surface-primary\">\n<div class=\"sticky top-[calc(var(--sticky-padding-top)+9*var(--spacing))]\">\n<div class=\"absolute end-0 bottom-0 flex h-9 items-center pe-2\">\n<div class=\"bg-token-bg-elevated-secondary text-token-text-secondary flex items-center gap-4 rounded-sm px-2 font-sans text-xs\"><\/div>\n<\/div>\n<\/div>\n<div class=\"overflow-y-auto p-4\" dir=\"ltr\"><code class=\"whitespace-pre!\">\u20b939.45<br \/>\n<span class=\"hljs-bullet\">+<\/span> \u20b919.73<br \/>\n<span class=\"hljs-section\">+ \u20b91.97<br \/>\n----------------<\/span><br \/>\n= \u20b961.15<br \/>\n<\/code><\/div>\n<\/div>\n<hr data-start=\"1530\" data-end=\"1533\" \/>\n<h3 data-start=\"1535\" data-end=\"1565\">\u2705 Final Summary for Customer<\/h3>\n<ul data-start=\"1567\" data-end=\"1705\">\n<li data-start=\"1567\" data-end=\"1608\">\n<p data-start=\"1569\" data-end=\"1608\">Total Outstanding at Due Date: \u20b98,000<\/p>\n<\/li>\n<li data-start=\"1609\" data-end=\"1647\">\n<p data-start=\"1611\" data-end=\"1647\">Total Interest Charged: <strong data-start=\"1635\" data-end=\"1645\">\u20b961.15<\/strong><\/p>\n<\/li>\n<li data-start=\"1648\" data-end=\"1705\">\n<p data-start=\"1650\" data-end=\"1705\">Closing Balance (before new charges): \u20b91,000 + \u20b961.15<\/p>\n<\/li>\n<\/ul>\n<hr data-start=\"1707\" data-end=\"1710\" \/>\n<h3 data-start=\"1712\" data-end=\"1747\">\ud83e\udde0 Simple Rule (User Explanation)<\/h3>\n<ul data-start=\"1749\" data-end=\"1944\">\n<li data-start=\"1749\" data-end=\"1779\">\n<p data-start=\"1751\" data-end=\"1779\">No interest before due date.<\/p>\n<\/li>\n<li data-start=\"1780\" data-end=\"1812\">\n<p data-start=\"1782\" data-end=\"1812\">Interest starts from due date.<\/p>\n<\/li>\n<li data-start=\"1813\" data-end=\"1844\">\n<p data-start=\"1815\" data-end=\"1844\">Interest is calculated daily.<\/p>\n<\/li>\n<li data-start=\"1845\" data-end=\"1892\">\n<p data-start=\"1847\" data-end=\"1892\">Each payment reduces the balance immediately.<\/p>\n<\/li>\n<li data-start=\"1893\" data-end=\"1944\">\n<p data-start=\"1895\" data-end=\"1944\">Interest is calculated only on remaining balance.<\/p>\n<\/li>\n<\/ul>\n<hr \/>\n<h2>3) Split Interest: Current vs Previous Due (before\/after due date)<\/h2>\n<p><strong>What it does:<\/strong> Splits the last bill into <strong>Current Amount<\/strong> and <strong>Previous Due<\/strong> and applies interest separately, respecting payments before\/after due.<br \/>\n<strong>When to use:<\/strong> You want precise, fair interest allocation between new charges and arrears.<br \/>\n<strong>How it works:<\/strong><\/p>\n<ul>\n<li>Track payments before due \u2192 first knock off arrears, then current.<\/li>\n<li>Accrue day-wise interest between transaction points.<br \/>\n<strong>Example:<\/strong> Current \u20b95,000; Previous Due \u20b93,000; Paid \u20b92,000 on 12 Aug (before due 15 Aug). The \u20b92,000 reduces Previous Due first (to \u20b91,000). After due, interest applies on the remaining buckets day-wise.<\/li>\n<\/ul>\n<blockquote><p>Code paths:<\/p>\n<ul>\n<li>From bill date: <code>int_on_prev_bill_curamt_and_dueamt_from_bill_date<\/code><\/li>\n<li>Split principal focus: <code>int_on_prev_bill_cur_and_due_principal_amount_from_bill_date<\/code><\/li>\n<li>Standard split: <code>int_on_prev_bill_curamt_and_dueamt<\/code><\/li>\n<\/ul>\n<\/blockquote>\n<hr \/>\n<h2>4) Interest on Outstanding (Simple)<\/h2>\n<p><strong>What it does:<\/strong> Applies interest on the <strong>net outstanding<\/strong> for the cycle (can also consider another bill type if configured).<br \/>\n<strong>When to use:<\/strong> You want a clean \u201cone number\u201d basis for a cycle (simple, not day-wise).<br \/>\n<strong>How it works:<\/strong><br \/>\nOutstanding (including tax, optionally adding fetched payments) \u2192 Interest by cycle\/day factor.<br \/>\nRespects <strong>Minimum Amount<\/strong> (no interest if outstanding \u2264 min).<br \/>\n<strong>Example:<\/strong> Outstanding \u20b912,000; min \u20b9500; 1 full month assumed \u2192 \u20b912,000 \u00d7 18% \u00f7 12 = <strong>\u20b9180<\/strong>.<\/p>\n<blockquote><p>Code paths: <code>int_on_outstanding_simple<\/code><\/p><\/blockquote>\n<hr \/>\n<h2>5) Interest on Outstanding (During Cycle)<\/h2>\n<p><strong>What it does:<\/strong> Similar to (4) but uses the cycle\u2019s <strong>actual dates and movements<\/strong>, meant for \u201cwithin the billing cycle\u201d interest.<br \/>\n<strong>When to use:<\/strong> You need interest to reflect in-cycle changes.<br \/>\n<strong>How it works:<\/strong> Uses cycle start\/end, fetched bills\/payments if configured; applies factor\/day count accordingly.<br \/>\n<strong>Example:<\/strong> Balance fluctuates in Aug; final computed interest reflects partial periods rather than a flat month.<\/p>\n<blockquote><p>Code paths: <code>int_on_outstanding_during_cycle<\/code><\/p><\/blockquote>\n<hr \/>\n<h2>6) Latest Due from Last Bill (Selected Plan)<\/h2>\n<p><strong>What it does:<\/strong> Applies interest <strong>only on the last bill\u2019s latest due<\/strong> between cycle end and the next bill date.<br \/>\n<strong>When to use:<\/strong> You want to target just the most recent due amount for the interim period.<br \/>\n<strong>How it works:<\/strong><br \/>\nInterest = (Last due amount) \u00d7 (Rate) \u00d7 (days from cycle end \u2192 bill date).<br \/>\n<strong>Example:<\/strong> Due \u20b93,000; from 31 Aug to 5 Sep (5 days) \u2192 \u20b93,000 \u00d7 18% \u00d7 (5\/365) \u2248 <strong>\u20b97<\/strong>.<\/p>\n<blockquote><p>Code path: <code>int_latest_due_from_last_bill<\/code><\/p><\/blockquote>\n<hr \/>\n<h2>7) Compounded Month-on-Month<\/h2>\n<p><strong>What it does:<\/strong> Adds monthly interest to the balance and compounds it each month (until cleared or paid).<br \/>\n<strong>When to use:<\/strong> You want stronger deterrence for long non-payment.<br \/>\n<strong>How it works:<\/strong><br \/>\nEach month: Interest = (Current balance) \u00d7 (Monthly rate). New balance = balance + interest \u2212 payments (of that month).<br \/>\n<strong>Example:<\/strong> Start \u20b910,000, 18% p.a. \u2192 1.5% per month.<\/p>\n<ul>\n<li>Month 1: \u20b9150 \u2192 balance \u20b910,150<\/li>\n<li>Month 2: interest on \u20b910,150, and so on.<\/li>\n<\/ul>\n<blockquote><p>Code path: <code>int_cmpnd_mon_on_mon<\/code><\/p><\/blockquote>\n<hr \/>\n<h2>8) One-Time Interest if Balance Exceeds Minimum<\/h2>\n<p><strong>What it does:<\/strong> Looks at the <strong>latest balance<\/strong>; if it\u2019s above the configured <strong>Minimum Amount<\/strong>, charges <strong>one-time<\/strong> interest for the cycle.<br \/>\n<strong>When to use:<\/strong> Light-touch policy\u2014charge once if dues are notable.<br \/>\n<strong>How it works:<\/strong><br \/>\nInterest = (Last balance) \u00d7 (Rate) \u00d7 (cycle factor).<br \/>\n<strong>Example:<\/strong> Last balance \u20b98,000; min \u20b9500; 1 cycle \u2192 interest \u2248 <strong>\u20b9120<\/strong> (at 18% p.a. month basis).<\/p>\n<blockquote><p>Code path: <code>int_one_time_exceed_due<\/code><\/p><\/blockquote>\n<hr \/>\n<h2>9) \u201cDue on Previous + Current Bill\u201d (builder)<\/h2>\n<p><strong>What it does:<\/strong> Prepares the principal components (previous vs current, minus advances\/own interest line) for interest calculation; used by other methods.<br \/>\n<strong>When to use:<\/strong> Internal step; explains why interest sees those amounts.<br \/>\n<strong>Example:<\/strong> If advance \u20b9500 existed, the \u201camount for interest\u201d is adjusted downward before interest is applied.<\/p>\n<blockquote><p>Code paths: <code>due_on_prev_cur_bill<\/code>, <code>due_on_prev_cur_bill_new<\/code><\/p><\/blockquote>\n<hr \/>\n<h2>10) \u201cDelay Due on Previous Current Bill\u201d (specialized)<\/h2>\n<p><strong>What it does:<\/strong> For special setups: builds amount from prior bill\u2019s unpaid (net of advances\/that interest line) up to last due date and tracks matching payments.<br \/>\n<strong>When to use:<\/strong> For specific societies\/plans needing this exact behavior.<br \/>\n<strong>Example:<\/strong> If your society plan expects \u201ccarry last bill\u2019s net due until its due date\u201d, this is the one.<\/p>\n<blockquote><p>Code path: <code>delay_due_1<\/code><\/p><\/blockquote>\n<hr \/>\n<h3>Notes on Configuration that affect results<\/h3>\n<ul>\n<li><strong>Factor<\/strong>:\n<ul>\n<li><strong>By Days<\/strong> \u2192 proportional to actual days between events.<\/li>\n<li><strong>By Cycle<\/strong> \u2192 full period; doesn\u2019t prorate by days.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Minimum Amount<\/strong>: If set, balances at\/below this won\u2019t attract interest in some modes.<\/li>\n<li><strong>Debits\/Adjustments<\/strong>: Some modes can <strong>include debit entries<\/strong> as part of outstanding before applying interest.<\/li>\n<li><strong>Other Bill Type<\/strong>: Certain modes can fetch another bill type (e.g., maintenance vs some custom bill) to use its due\/outstanding for interest.<\/li>\n<li><strong>Rounding<\/strong>: Internally, amounts may be rounded (e.g., to 2\u20133 decimals).<\/li>\n<\/ul>\n<hr \/>\n<h2>Quick picker (which option should I choose?)<\/h2>\n<ul>\n<li><strong>Simple &amp; fair post-due<\/strong>: <strong>Interest after Due Date<\/strong>.<\/li>\n<li><strong>Strict split (current vs arrears)<\/strong>: <strong>Split Interest: Current vs Previous Due<\/strong>.<\/li>\n<li><strong>Just charge on cycle\u2019s net amount<\/strong>: <strong>Outstanding (Simple)<\/strong>.<\/li>\n<li><strong>Reflect mid-cycle changes<\/strong>: <strong>Outstanding (During Cycle)<\/strong>.<\/li>\n<li><strong>Tough policy on long dues<\/strong>: <strong>Compounded Month-on-Month<\/strong>.<\/li>\n<li><strong>Light-touch once per cycle<\/strong>: <strong>One-Time if Balance Exceeds Minimum<\/strong>.<\/li>\n<li><strong>Target only latest due<\/strong>: <strong>Latest Due from Last Bill<\/strong>.<\/li>\n<\/ul>\n<hr \/>\n<h2>Tiny end-to-end example (day-wise mode)<\/h2>\n<ul>\n<li><strong>Rate<\/strong>: 18% p.a.<\/li>\n<li><strong>Bill<\/strong>: 1 Aug; <strong>Due<\/strong>: 15 Aug<\/li>\n<li><strong>Amounts<\/strong>: Current \u20b95,000; Previous Due \u20b93,000<\/li>\n<li><strong>Payments<\/strong>: \u20b92,000 on 10 Aug (before due), \u20b91,000 on 20 Aug (after due)<\/li>\n<li><strong>After-Due interest<\/strong> will apply on what\u2019s still unpaid <strong>after<\/strong> 15 Aug:\n<ul>\n<li>Before due, \u20b92,000 reduces previous due \u2192 arrears become \u20b91,000.<\/li>\n<li>On 16 Aug, outstanding = \u20b91,000 (arrears) + \u20b95,000 (current) = \u20b96,000.<\/li>\n<li>Paid \u20b91,000 on 20 Aug \u2192 interest window is 16\u201320 Aug on \u20b96,000:<br \/>\n\u20b96,000 \u00d7 18% \u00d7 (5\/365) \u2248 <strong>\u20b915<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<hr \/>\n<p>&nbsp;<\/p>\n<h2>Also visit:<\/h2>\n<h3><a title=\"How to get started Billing\" href=\"https:\/\/factech.ai\/blog\/ufaqs\/start-billing\/\" target=\"_blank\" rel=\"noopener\">How to get started Billing<\/a><\/h3>\n<h3><a title=\"What are different bill formats?\" href=\"https:\/\/factech.ai\/blog\/ufaqs\/what-are-different-bill-formats\/\" target=\"_blank\" rel=\"noopener\">What are different bill formats?<\/a><\/h3>\n<\/div>\n\t\t\n\t\t\t<div class='ewd-ufaq-faq-custom-fields'>\n\n\t\n<\/div>\n\t\t\n\t\t\t\n\t\t\n\t\t\t\n\t\t\n\t\t\t\n\t\t\n\t\t\t\n\t\t\n\t\t\t<div class='ewd-ufaq-permalink'>\n\t\n\t<a href='https:\/\/factech.ai\/blog\/ufaqs\/what-are-different-interest-calcualtion-options-in-factech-billing-system\/'>\n\t\t\n\t\tPermalink\t\t <div class='ewd-ufaq-permalink-image'><\/div> \t\n\t<\/a>\n\n<\/div>\n\t\t\n\t\t\t\n\t\t\n\t\t\t<div class='ewd-ufaq-back-to-top'>\n\t\n\t<a class='ewd-ufaq-back-to-top-link'>\n\t\tBack to Top\t<\/a>\n\n<\/div>\n\t\t\n\t<\/div>\n\n<\/div>\n\t<\/div>\n\n\t\n<\/div>","protected":false},"excerpt":{"rendered":"<p>A What are different interest calcualtion options in Factech Billing System? Common terms (used below) Bill Date: The date the bill is generated. Due Date: Last date to pay without interest. Current Amount: This bill\u2019s charges\/taxes. Previous Due (Arrears): Unpaid from older bills. Outstanding\/Balance: What\u2019s still unpaid at a point in time. Rate: Interest %<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","template":"","ufaq-category":[281,167,3235],"ufaq-tag":[4306,4304,4296,4297,4299,4302,3943,4303,4300,4298,3942,4305,4307,3941,4301],"ufaq_folder":[],"class_list":["post-10968","ufaq","type-ufaq","status-publish","hentry","ufaq-category-bill-generation","ufaq-category-billing","ufaq-category-irn-e-invoice","ufaq-tag-anacity-billing-system","ufaq-tag-best-common-area-maintenance-software","ufaq-tag-best-practices-of-cam-interest-calcualtion","ufaq-tag-best-practices-of-cam-interest-calcualtion-in-societies","ufaq-tag-cam-billing-interest","ufaq-tag-delayed-interest-in-gated-socities","ufaq-tag-different-delayed-payment-charge-options","ufaq-tag-gated-community-and-cam-delay-interest","ufaq-tag-how-rwa-apply-delayed-interest","ufaq-tag-how-to-apply-interest-on-delay-payment","ufaq-tag-interest-options-available","ufaq-tag-mygate-billing-solution","ufaq-tag-nobrokerhood-billing-software","ufaq-tag-recurring-billing-interest-calculation","ufaq-tag-what-is-delayed-due-interest"],"aioseo_notices":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What are different interest calcualtion options in Factech Billing System? - Facility Technology<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/factech.ai\/blog\/\/ufaqs\/what-are-different-interest-calcualtion-options-in-factech-billing-system\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What are different interest calcualtion options in Factech Billing System? - Facility Technology\" \/>\n<meta property=\"og:description\" content=\"A What are different interest calcualtion options in Factech Billing System? 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