hi
transfer days
Transfer days are the days required for a payment to go from the payer to the payee (bank run times for payment transfers, for example). You can also include late account maintenance with transfer days.
Transfer days are only taken into consideration for incoming payments. Transfer days have absolutely no meaning for open items.
Transfer days are deducted from the document date.
The document date of the payment is May 6th. If three transfer days have been defined, May 3rd is taken as the payment date.
<b>tolerance days".</b>
Tolerance days for calculating interest on arrears
A customer can clear payables which are already due without any interest being calculated. This can occur due to grace days.
Examples
Examples (Assume that the grace period= 2 days):
1.) An item is 20 days overdue. If you subtract the two-day grace period, the item is still 18 days overdue. This means that interest will be charged on the item. However, 20 days of interest are calculated.
2.) Item is one day overdue. If you subtract the two-day grace period, there is no remaining time period upon which interest is to be calculated. This means that no interest will be charged to the item. However, the item will not be classified as being not yet due.
3.) An item is not yet due. No grace period is taken into consideration in this case.
The grace days are added at the time an item becomes due, as long as
the item was not paid (cleared) before it became due. If a period
of time subject to interest charges in relation to the upper limit of the time period and/or the clearing document date, interest is charged to the item as of the due date or lower limit of the perio of time. Otherwise, the item is not selected.
Interaction between grace days and transfer days: Transfer days are deducted first. The result is then compared with the grace days.
assign points if useful
thanks
Srilakshmi
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