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Administrator Guide
Last Updated: 2023-06-23
Set Up Finance Charge Rules

Set Up Finance Charge Rules

Security:
Set Up: Interest Rate and Late Fee Rule
 domain in the Common Financial Management functional area. See Steps: Enable Functional Areas and Security Policies and Steps: Set Up Security Permissions.
You can configure interest or late fee rules to calculate finance charges automatically for overdue invoices. When you set the rules to run on a recurring basis, Workday continues to calculate the finance charge until the customer pays the invoice.
  1. Access the
    Maintain Finance Charge Rules
     task.
  2. As you complete the task, consider:
    Option Description
    Rule Type
    When you configure an
    Interest Rate
     rule type, Workday doesn't process compound interest.
    Calculation Options
    Workday displays this field only when the
    Frequency
     is
    Recurring
    .
    • Daily
      : (APR/365 * # of Days Past Due * Amount Due)
    • Monthly
      : (APR/12 * # of Months Past Due * Amount Due)
    Currency
    Workday converts the late fee currency to the invoice currency when they differ.
    Inactive
    When you select this check box and set a rule to inactive, Workday prevents you from saving changes to the payment or invoice that are part of finance charge calculations.
    Days to Generate Interest Document
    Enter the number of days by which you want to delay generating a finance charge invoice.
    Workday applies this value to only the first calculation run.
You want to charge interest for invoices that are past due as of October 24.
Configuration
Value
Rule Type
Interest Rate
Annual Percentage Rate
12%
Calculation Option
  • Daily
  • Monthly
Assume that the past due amount is $10,000, Workday uses these calculations for the interest charge amount:
  • $100.19 for daily option: (.12/365)*31*10,000
  • $100 for monthly option: (.12/12)*1 *10,000
Grace Period Days
5
When you process interest charges by:
  • Daily calculation rules: Workday doesn't include invoices with a due date of October 24 until after the October 29 processing date.
  • Monthly calculation rules: Workday processes the finance charge on October 31 and includes all invoices with a due date of October 24 in the calculations.
Days to Generate Interest Document
6
When you process interest charges by:
  • Daily calculation rules: Workday doesn't generate a finance charge invoice until after the October 30 processing date.
  • Monthly calculation rules: Workday processes the finance charge on October 31, and generates a new finance charge document.
You can set interest rate and late fee rules as defaults. You can also define rule overrides for a company, or customer group and category.