What is interest on arrears in SAP FS-AM - Account Management?

SAP Term: interest on arrears

• Component: FS-AM

• Component Name: Account Management

• Description: Interest charged by the bank to the debtor if the debtor has not paid, or has only partially paid, the receivable by the expected payment date. You can calculate interest on arrears only for loans for which the payment plan principle applies.

Smart SAP Assistant

• Key Concepts: 
  Interest on arrears is a feature of the SAP FS-AM Account Management component that allows users to calculate and manage interest on overdue payments. It enables users to define interest rates for different types of arrears, and to automatically calculate and post interest on overdue payments. 
  
  How to use it: 
  To use the interest on arrears feature, users must first define the interest rates for different types of arrears. This can be done in the SAP system by navigating to the “Interest on Arrears” tab in the FS-AM Account Management component. Once the interest rates have been defined, users can then calculate and post interest on overdue payments. This can be done by selecting the “Calculate Interest” option from the “Interest on Arrears” tab. 
  
  Tips & Tricks: 
  When defining interest rates for different types of arrears, it is important to ensure that they are accurate and up-to-date. This will ensure that the correct amount of interest is calculated and posted for each overdue payment. Additionally, it is important to regularly review and update the interest rates as needed. 
  
  Related Information: 
  For more information about using the interest on arrears feature in SAP FS-AM Account Management, please refer to the official SAP documentation here: https://help.sap.com/viewer/product/SAP_FS-AM/latest/en-US/f9f8d7a2b3e14c8a9f3d7c2b6f5e4d1a.html