Introduction

The Interest on Overdue Invoice module enables businesses to automatically calculate and apply penalty interest to invoices that are not paid by their due date. Interest can be computed on a daily, monthly, or annual basis depending on defined payment terms. This ensures fair compensation for late payments and reinforces timely customer settlement.

Key Features

• Define penalty interest rates (daily, monthly, or yearly) linked to specific payment terms.

• Automatically compute and append interest lines to overdue invoices.

• Generate corresponding journal entries to reflect interest income accurately.

• Support audit-worthy tracking of interest events tied to invoice due dates.

• Offer flexibility in configuring triggers, such as grace periods or interest-free windows.

Benefits

• Encourage timely payments by transparently applying penalty interest.

• Reduce manual effort and the risk of missed calculations for overdue accounts.

• Improve accounting accuracy with systematic recording of interest charges.

• Maintain fairness and consistency in cash collections and credit control.

• Provide clear audit trails for interest-related adjustments and accounting.

Compatibility & Technical Details

• Required Modules: Invoicing (account), optional integration with payment term configurations.

• Technical Name: interest_on_overdue_invoice

• License: Proprietary (OPL) or open-source (AGPL), depending on the developer’s distribution.

• Installation Steps:

  1. Ensure core Invoicing module is installed and active.

  2. Install the Interest on Overdue Invoice module.

  3. Define interest rates in payment term settings.

  4. Let the system auto-generate interest lines and journal entries when invoices become overdue.

  5. Review interest adjustments via standard invoice or accounting reports.