Payments in Advance versus Payments in Arrears

Payments in Advance versus Payments in Arrears

When building the payment schedule in ASPIRE it is important to understand the period that the payment is to cover.  This will help when wanting to display the payment period on invoices.


Payments in Advance (most common)

When building this payment schedule, you will want to use a payment frequency of Advance for the first payment line of the schedule.  The Advance frequency will set the payment period to start on the due date and be for the following month. (i.e. Due Date 4/1/22 Period = 4/1/22 through 4/30/22)  The Advance setting also determines the Maturity Date for the contract as the Maturity Date and any Residual due date will be equal to the first day of the next period. (i.e. 5/1/23)

 

Payments in Arrears

When building this payment schedule you would use a frequency other than Advance for the first payment line of the schedule.  This will set the payment period to be the period before the due date.  (i.e. Due Date 4/1/22 Period = 3/2/22 through 4/1/22)  This will set the Maturity Date of the contract to be equal to the last due date of the payment stream.  So if there is a residual due it will be due on the same day as the final payment stream.



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