The installment plan can be created for one or more open items of the same contract account, provided they have the same currency. When selecting open items for installment plans, the priority with which original items of the plan are cleared when payments are received, can be specified.
The installment plan creation requires the number of installments within the plan and the interest key. The interest key controls the grace period, interest frequency, interest interval unit, and the interest calculation rule. You can store frequently recurring installment terms and conditions in the system as default installment plans (installment plan types).
When you create an installment plan, you can specify the percentage amount of the total amount that is to be used as the first installment. The system calculates the remaining installments as required.
When you create an installment plan, you can also specify partial amounts.
If the agreement for payment in installments is canceled, you can deactivate the installment plan manually. The original receivable is then active again. The link between the original receivables and the installment plan is deleted.
Interest is calculated for the duration of the installment plan. Interest can be recalculated and posted if customers fall behind with their payments again. For example, a customer phones and requests an installment plan with 6 installments from Jan 1 to June 1. However, on Aug 1, the customer still has an outstanding balance. It is possible to calculate and post interest on the unpaid balance that exists after June 1.
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