Interest on Deposits in AR - Case Study
Posted: Mon May 25, 2009 8:24 am
Dear All,
Scenario is like this
We will be receiving the money as advance or booking advance from the customer based on some sales (Construction yet to start)
For. ex.. 50 Lakhs as Advance saying that we will be collecting the further dues as per the payment plan
Like start of construction 10%, within 6 months 15% etc within 6 month that is the booking date is on 5th May-200 and after one year or 2 years of time I will have the sales agreement time based on the start of construction (for ex. 25th Jun-2009 ) Till this period he will not be paying anything other than the booking advance of 50 Lakhs
now I am holding his amount for 2 yrs for which we want to give 10 or 12% interest where as these interest amount may be paid or may be adjusted with the future invoices
but the customer should know that as on 05-May-2008 he got the 10% interest
How to do it and the case may be like this
Its not necessary that the customer should pay the adv amt in one shot he can make the payment 01-may-08 10 Lakhs, 12-may-08 15 Lakhs and accordingly interests have to be calculated.
Regards,
Anu
Scenario is like this
We will be receiving the money as advance or booking advance from the customer based on some sales (Construction yet to start)
For. ex.. 50 Lakhs as Advance saying that we will be collecting the further dues as per the payment plan
Like start of construction 10%, within 6 months 15% etc within 6 month that is the booking date is on 5th May-200 and after one year or 2 years of time I will have the sales agreement time based on the start of construction (for ex. 25th Jun-2009 ) Till this period he will not be paying anything other than the booking advance of 50 Lakhs
now I am holding his amount for 2 yrs for which we want to give 10 or 12% interest where as these interest amount may be paid or may be adjusted with the future invoices
but the customer should know that as on 05-May-2008 he got the 10% interest
How to do it and the case may be like this
Its not necessary that the customer should pay the adv amt in one shot he can make the payment 01-may-08 10 Lakhs, 12-may-08 15 Lakhs and accordingly interests have to be calculated.
Regards,
Anu