This feature is currently only available to UK customers
With frequently changing interest rates, its more important then ever to charge your customers the correct amount of interest to be compliant.
Our Bank of England interest rate based calculations will correctly apply the rate at the time the interest was accrued, even if a invoice spans across multiple interest rate changes!
This guide will show you how to configure your policy, to generate late fees like the below. (Created for a invoice that was overdue for 1 year, spanning 6 rate changes)
This 1 year overdue invoice
Will generate this late interest charge
Or as part of a statement interest charge
Configuration
Create a new "Invoice Late Fee" policy. The Bank of England option will only show if your region in Xero or Quickbooks is set to "UK", and the policy calculation type is set to "Interest Rate per Annum"
Toggling the "Apply the Bank of England base rate" option on, will mean that the Bank of England rate at the time, plus the value you enter in the "Percent per Annum" field will be applied.
If you are looking to include this for a "Statement Interest Charge", you will find the same settings in that policy also. The only difference is the resulting invoice will have all periods condensed into a single line item.
For example, if the Bank of England rate on a given date is 4.25% and you have entered 8% for your charge, we will calculate the interest at 12.25% P.A (4.25% + 8%)
Thats it! You can be confident you are charging the correct amount of interest, no matter when, or how old the debt may be.