How to set up and apply Interest Rules.
Things to note before applying interest rules:
You can now charge interest on past-due Invoices. Interest owed can also be compounded if desired.
Once the interest rule is created, applied to a matter, and has run its assigned 'term', you will be able to view all interest charges broken down by the user, and activity in the pending billable activity screen. *For example, if you set an interest rate term of 30 days, after the completion of the 30-day term, interest will begin to calculate on the invoice. *
IMPORTANT: Interest is calculated off of the invoice total, NOT the remaining balance. Meaning, if your client was invoiced $1000.00, and made a $500 payment. Once the assigned term went into effect, interest would be calculated off of the $1000.00 invoice, not the remaining $500.00 balance.
If you'd like interest to be calculated off of the remaining balance of an invoice, please give Rocket Matter Support a call at 888-432-1529 and we can enable this for you. Once this is applied, this is applicable for all matters, and ongoing interest rules.
1. Select 'Settings' from the left-hand navigation panel.
2. Click 'Setup Interest Rules'.
3. Create an Interest Rule 'Title', 'Term', and 'Rate'. Additionally, enable 'Recurs', 'Compounded Interest', and 'Apply to ALL unpaid invoices', as needed. Then, click 'Add Interest Rule'.
Interest Rule Title: The title description that will appear on your Invoices.
Term: Amount of days until the rule goes into effect.
Rate: The rate of interest you'd like to be applied.
Recurs:
- If this is NOT turned on, the interest will stop accruing after one term.
- If this IS turned on, this rule will continue to be applied to all future balances.
Compound Interest: Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest.
Apply to ALL unpaid invoices: If turned on this setting will apply interest to all invoices, even those with an Invoice date prior to when this rule was applied to the Matter. Interest will be charged on those pre-existing Invoices moving forward. If this is turned off, interest will only be added to Invoices generated after this rule is applied to the Matter.
4. Navigate to the Matter you'd like to apply the interest to and select 'Edit Matter'.
* If you set an interest rate term of 30 days, after the completion of this term if a payment is back dated on the 30th day, interest will be calculated on the Invoice.
NOTE: Interest can only be applied to Fees and/or Costs.
Rocket Matter does not include interest on debit adjustments.
5. Click to expand the 'Billing Information' section of the Matter.
6. Select the Interest Rule you'd like to apply and click 'Save Matter'.
7. The title description is what will appear on your Invoices.
IMPORTANT: Once the interest rule is created, applied to a matter, and has run its assigned 'term', you will be able to view all interest charges broken down by the user, and activity in the pending billable activity screen.
8. Now, be sure to update your invoice template!
Here's a list of available interest merge fields that can be inserted into your invoice template.
- «Invoice.InterestRate» This Merge field reflects the interest 'Rate' calculated against the total amount of this invoice.
- «Invoice.InterestDueBeforeDate» This Merge field reflects the date result of the 'Term' days added to the date this invoice was processed.
- «Invoice.TotalInterestFees» This reflects the total amount of all interest fees on this invoice.
Need help on how to insert merge fields on your invoice template, click here!
Need more help? Contact our Award-Winning Product Specialists at (888) 432-1529 or [email protected].