Tip of the Week: Simple and Compound Interest
2 min read

Tip of the Week: Simple and Compound Interest

Free on-demand webinar

How to Get Clients to Pay On Time: 15 Tips in 15 Minutes!

Watch Now

Recommended by

ForbesAdvisor - The Best Legal Billing Software Of 2022

Learn How You Can Get More Reviews For Your Law Firm

Download free guide
Table of contents
2
3
Share:
2 min read

Are you worried your clients will be charged interest on top of interest? At TimeSolv, we understand that this might not be the way every business would like to charge interest, so we actually allow users to specify interest calculation between ‘Simple’ or ‘Compound’. This Tip of the Week explores the differences between the two types of interest calculations and how to apply them against your clients.

In the case of ‘Simple Interest’, interest will always be calculated against the principal balance amount.

Whereas in the case of ‘Compound Interest’, it will be calculated against the total balance amount. In short, if interest is unpaid, your Clients will be charged interest on top of interest because it is calculated on the balance owed. For example, if your invoices give a 30 day grace period, then no interest is calculated within the first 30 days. On day 31, it would start to calculate interest on the unpaid balance owed at the percentage that you have assigned it.

There are several levels under which users can set up interest definitions. To specify global firm-wide interest settings, click under Clients>Settings>Invoice Settings. For Client or Matter level settings, click under Clients>Clients & Matters>[Client or Matter name]>Invoice Settings.

Click on Apply Interest? to enable all subsequent interest related fields.

The Interest Rate is based on an annual percentage rate. As an example, if you were to charge a 5% annual interest, you would enter 5 in this field. Or, if you wanted to charge 1.5% monthly interest, you would type in 18 (because 1.5 * 12 months of the year = 18).

Specify the Interest Type and Grace Period (days) – this is the amount of provisional time you will allow your Client(s) to make a payment beyond the due date before you begin to charge interest.

The Payment Terms define when interest will start accruing, which is not until the Grace Period plus specified Payment Terms days have run their course.

If you’d like TimeSolv support for more help in understanding interest calculations in TimeSolv, please call 1.800.715.1284 or Contact support!

Contact support

Stay up to date with the latest articles, educational resources, and news

Subscribe to our newsletter

You might also like

Tip of the Week: Include Inactive Staff and Projects in Time Search

At TimeSolv, we are committed to continuously improving our software to meet your...
Tip of the Week Streamline Time Tracking with Read-Only Task Code Narratives

Tip of the Week: Streamline Time Tracking with Read-Only Task Code Narratives

This week, we're excited to introduce an enhancement that enables users to make task...
Tip of the Week Introducing the Ability to Mark Expenses as Vendor Paid

Tip of the Week: Introducing the Ability to Mark Expenses as Vendor Paid

In the fast-paced world of legal and professional services, staying ahead requires more...
Tip of the Week Create Consolidated Invoice Groups with Ease!

Tip of the Week: Create Consolidated Invoice Groups with Ease!

In the dynamic world of legal and professional services, staying ahead often means...
Tip of the Week Introducing Unique ID for Time Entries

Tip of the Week: Introducing Unique ID for Time Entries

In the fast-paced world of professional services, managing time efficiently is paramount...
Tip of the Week Unlocking the Power of Customization - Introducing the Option to Download Firm View or Client View of Your Invoice

Tip of the Week: Unlocking the Power of Customization – Introducing the Option to Download Firm View or Client View of Your Invoice

TimeSolv is excited to introduce a new feature that empowers you with even greater...
Managing Contacts and Associations

Tip of the Week: Managing Contacts and Associations

Contacts are an important part of TimeSolv, as they are used to send invoices and...
Tip of the Week: Introducing the Financials Dashboard Feature - Gain Powerful Insights at Your Fingertips!

Tip of the Week: Introducing the Financials Dashboard Feature – Gain Powerful Insights at Your Fingertips!

TimeSolv is thrilled to announce the launch of an exciting new feature - the Financials...
Ability to Transfer Payments from Operating to Trust Account

Ability to Transfer Payments from Operating to Trust Account

TimeSolv has just rolled out a new feature that allows users to transfer money entered...

Tip of the Week: Payments and Allocations

Invoicing is an essential aspect of any business, as it allows for timely and accurate...