Starting 01.05.24 we're changing how we bill due interests to bill based on the loan amount that was outstanding in the previous month.
Rest assured, our pricing remains unchanged - only the billing frequency is modified.
This new system is designed to streamline the billing process, making it clearer and more aligned with standard accounting practices, thus likely reducing administrative overhead for you.
Old billing method
Previously, the billing for interests on loans was tied to repayment. Here's how it worked:
Invoice posting: On the 5th of each month, we posted the invoice for interests for loans repaid in the previous month.
Charging of interests: On the 15th of the month we debited the interests from your bank account.
New billing method
The new method changes the timing and basis for the billing of interests:
Invoice posting: On the 1st of each month, we will post the invoice for all outstanding loan amounts of the previous month.
Charging of interests: During the first three days of the month, we will debit the interests from your bank account.
Benefits of the new billing system
Simplicity: You receive one consolidated bill at the start of the month, making it easier to verify and confirm your interest payments.
Accounting efficiencies: Having the invoice and debits occur at the beginning of the month aligns with typical monthly accounting practices, which helps in timely record-keeping and monthly closing. Plus, the invoice PDF will provide the charged interests and all necessary information per loan to facilitate your accounting entries.
Examples to understand our new billing
Loans taken before 01.05.24: These will continue to be billed based on the repayment date until fully repaid.
Loans taken after 01.05.24: These will be billed based on the outstanding loan amount from the previous month.
Mixed Scenario: If you have loans taken before and after the 01.05.24, the interest on the earlier loan will be billed based on the repayment, while the later loan will be billed based on the outstanding amount.
How to read the billing invoice
To facilitate the review and creation of accounting entries you will find two tables that list the due interests per loan:
Table 1: Shows loans that are billed based on repayment from the previous month. This applies to loans issued until 01.05.2024.
Table 2: Shows loans that are billed based on the outstanding amount from the previous month. This is relevant for loans issued after 01.05.2024.
We'll send these via email, but you can also access them via the web app from Settings>Billing.