The Interest Calculator allows users who manage the settlement of cases to easily calculate and apply interest across specific Value items. Interest calculations are complex based on jurisdiction or firm/client contract. Calculation rules can vary by Case Type, accrual during pre-judgment vs. post-judgment, compounding method, and prime rates.
With this interest calculator, your firm can simplify the settlement workflow. For example, if your firm charges interest on costs that have been paid upfront on behalf of your client, such as medical bills, you can calculate interest on those costs and create a single Value entry for the total interest amount with an optional DTF entry.
NOTE: You must have Add permissions to Case > Value to access the Interest Calculator. To make changes to the Variable Monthly Interest Rates, you must also have Modify permissions to General > Firm Preferences.
To calculate interest:
Open the desired Case and navigate to the Value Tab.
Use the checkboxes to select Value items.
Click the three dots button above the grid and select the Calculate Interest option.
The Interest Calculator window will display with two panes. Use the fields in the Options pane to calculate interest and see the Interest Breakdown in the next pane.
The following fields are described below in the Options pane.
Variable Monthly Interest – When the checkbox is selected, you can set the variable interest by month (see "Configure Interest Rates" below for more information).
Interest Rate – Use this required field to set the interest rate with any number/decimal.
Accrual Start – Sets the accrual start date. This is a required field. Choose between:
• Value Creation Date - If any of the selected Value entries do not have a transaction attached, this will be the default selection.
• Case Date – When selected, an additional "Date" dropdown is shown with Case Dates that exist in this Case.
• Custom Date – When selected, an additional "Date" picker field is shown. Today's date will display be default. NOTE: The Accrual Start Date must come before the Accrual End Date.
Accural End – Sets the accrual end date. This is a required field. Choose between:
• Case Date – When selected, an additional "Date" dropdown is shown with Case Dates that exist in this Case.
• Custom Date – When selected, an additional "Date" picker field is shown. Today's date will display by default. NOTE: The Accrural End Date must come after the Accrual Start Date.
Save as Value – Use this required field to select an active Value Code. It is recommended to create an "Interest" Value Code to easily identify these Value and DTF interest items in reports.
Party – Use this required field to select a Party from this Case. The first Party in the Case shows as the default.
Check an additional DTF (Optional) – Select the checkbox to automatically create a DTF Value entry based off the added Value item for this calculated interest and the applied payment transaction. This can be left unchecked if you do not treat interest as an expense of your Value Code. To automatically create the DTF, ensure that your selected Value Code is flagged as "DTF" in the Value Codes Mini Directory.
6. Click the Calculate Interest button. Interest will be calculated as follows:
Compounded daily:
• Total Interest = (Value Amount – Value Reductions) * (1 + Interest Percent as a decimal/365) ^ (Accrual End Date – Accrual Start Date) – Value Amount – Value Reductions
Variable Monthly:
• Total Interest = (Value Amount – Value Reductions) * (1 + Interest Percent as a decimal/365) ^ (period start date – period end date [If the accrual start date is within the period, the accrual start date is used instead of the period start date. If the accrual end date is during the period, the accrual end date is used instead of the period end date. All periods are calculated for the interest accrual date range and added together for the final interest.]) - Value Amount – Value Reductions
Configure Interest Rates
Interest can now be calculated at variable rates per month. To configure interest rates, select the Variable Monthly Interest checkbox and click the Configure button next to the Interest Rates field. After variable interest rates have been configured and the calculated interest has been saved to the selected Value items, this checkbox will be selected by default the next time the Interest Calculator is accessed.
As mentioned above, you must have Modify permissions to General > Firm Preferences to make monthly interest rate changes. With only View permissions to Firm Preferences, the Variable Monthly Interest Rates window can still be accessed but all Rate fields will be disabled.
The Variable Monthly Interest Rates window will display, allowing changes to be made on the fly and automatically update the identical window in Firm Preferences >Time & Billing. Click Save Changes to retain any modifications.
If the accrual start and end fall within different months, Neos will use each month's interest rate when calculating the total interest.
7. The Interest Breakdown grid will display with the following columns:
Code – Shows the Value Code of the selected Value item(s).
Provider – Shows the Provider of each selected Value item.
Accrual Date – Shows the start date used in the interest calculation (e.g., if Accrual Start is set to Value Creation Date, this field will display the date the Value item was created).
Reduced Total – Shows the total amount minus any reductions.
Interest – Displays the calculated interest using the formula noted in step 6.
Totals are calculated at the bottom of the grid for the Reduced Total and Interest columns.
8. Any changes to the Options fields will disable the Save to Value button, allowing you to recalculate the interest before moving forward. NOTE: The calculated interest cannot exceed the maximum of $99,999.99 and will display an error message in the Interest Breakdown grid. [screenshot]
9. Once satisfied with the calculations, click the Save to Value button. The Interest Calculator window will close and a single Value item will be added to Value Tab with the combined interest.
Value Code – Displays the Value Code selected in the Interest Calculator.
Amount – Shows the combined interest amount.
Party – Displays the Party selected in the Interest Calculator.
Provider – Displays the Default Provider from Firm Preferences > Time and Billing Tab.
Memo – Depending on the type of interest, this field will display "Interest at [Interest Rate %] compounded daily" OR "Interest calculated using variable monthly interest".
Bill To – Displays the contact selected in the Billing Client field on the Case Tab. If the Billing Client field is blank, the Bill To field will default to the Party listed on the Value item.
10. If the "Create Additional DTF" checkbox was selected on the Interest Calculator, a Transaction for the full interest amount will be added to the created Value entry and a linked DTF Value entry will be created.
The selections made to the Options fields will be retained after the interest is saved to a new Value entry.