Skip to main content

Overdue Interest & Penalty Calculation

Track Delays, Compute Charges, and Apply Penalties Automatically

The Overdue Interest & Penalty Calculation feature in PrismERP enables businesses to manage and enforce payment discipline by automatically identifying overdue payments, calculating interest or penalty charges, and applying them to the relevant accounts or invoices. This ensures consistent revenue recovery, strengthens credit control, and improves financial performance.

What is Overdue Interest & Penalty Calculation?​

This feature allows you to define rules for interest and penalty on delayed payments—whether from customers, vendors, or loan repayments. When a payment surpasses its due date, PrismERP can automatically compute the additional charges and apply them to the ledger, helping organizations maintain control over receivables and payables.

Key Features​

✅ Automated Interest Calculation​

  • Calculates overdue interest based on user-defined rates and formulas.
  • Supports simple interest, compound interest, or flat penalty fees.

✅ Custom Penalty Rules​

  • Configure penalty slabs based on days overdue.
  • Apply fixed charges or percentage-based penalties.

✅ Real-Time Delay Tracking​

  • Identifies delayed invoices, EMIs, vendor dues, or loan repayments.
  • Generates alerts for aging accounts.

✅ Ledger Integration​

  • Automatically posts penalty or interest to the appropriate GL accounts.
  • Updates customer/vendor/loan account balances.

✅ Flexible Configuration Options​

  • Set rules per customer, invoice type, loan category, or vendor.
  • Define minimum grace periods and thresholds.

✅ Reporting & Audit Trail​

  • View reports of overdue transactions, penalties applied, and aging summaries.
  • Maintain traceability with time-stamped logs.

How It Works in PrismERP​

  1. Define Penalty Rules

    • Navigate to Accounts Overdue Interest Configuration`
    • Set interest rate, penalty type, grace period, and applicable accounts.

  2. Monitor Outstanding Balances

    • Navigate to Overdue Summary
    • View pending dues, days overdue, and calculated charges.

  3. Apply Charges Automatically

    • System will auto-generate a journal or voucher entry reflecting interest/penalty.
    • Optionally, send notifications to responsible parties.

Use Cases​

  • Applying overdue interest on customer invoices
  • Charging penalties for missed EMI schedules
  • Enforcing due dates on inter-company loans
  • Managing vendor contract penalties for delayed service

Integrated Modules​

  • Accounts Receivable
  • Loan & EMI Management
  • General Ledger
  • Customer Management
  • Vendor Payables

With PrismERP’s Overdue Interest & Penalty Calculation, you gain financial control by ensuring timely payments and automated enforcement of credit terms—improving cash flow and accountability across your organization.