Recourse and recourse interest

An invoice that is financed with recourse can be handed back to the client when the debtor does not pay. In Quiddly that is the Recourse action. This guide covers how an invoice gets recourse, what the action does, and how recourse interest is calculated and charged.

Financed with recourse, and recoursed

Two flags on the invoice are easy to mix up. Both show in the invoice view, see The Invoice View.

Flag	Meaning
Use Recourse	The invoice is, or will be, financed with recourse. Set it before the invoice is financed, with the RC icon on the invoice card on the factoring board or with a rule engine decision. See The Invoice Factoring View.
Is Recoursed	The Recourse action has been done on the invoice.

Recourse an invoice

1. Open the financed invoice and choose Recourse from the actions.

2. Confirm Are you sure you want to recourse invoice? with Recourse.

The action is offered for financed invoices that are active or paused and not yet recoursed. It needs a right. See Rights, roles and users and the rights catalogue.

When an invoice is recoursed, Quiddly:

• moves the financed amount of the invoice back to its service balance and marks the invoice Is Recoursed. The invoice stays open and the debtor still owes it;
• debits the client’s fund account with that amount;
• books the recourse on the recoursed ledger account;
• charges the recourse interest that has built up, see below.

Recourse is an internal accounting action. It sends no notification or data to an external financier.

To undo it, use Reverse recourse on the recourse event in the invoice’s financial events. Confirm with Confirm reverse of the recourse event. Quiddly creates a reversing event and the invoice is no longer recoursed.

Recourse interest

Recourse interest is what the client pays for an invoice that is overdue while it is financed with recourse. The rate is on the client’s Billing tab, on the row Invoice recourse interest.

When it accrues

Quiddly calculates the interest every night for an invoice that:

• is financed with recourse, has financed capital and an open balance, and has not been recoursed;
• is past its due date. Interest does not accrue before the due date, even if you recourse the invoice earlier;
• is active. A paused or disputed invoice only gets interest when its invoice profile has Calculate Recourse Interest When Invoice Is Paused ticked, under Late interest.

Only nights after the rate was saved on the billing list are counted, because the rate is looked up when the night’s calculation runs. Interest stops at the recourse.

Each night’s amount is the financed amount multiplied by the rate and divided by 360. The rate is the price on the billing list plus base interest, when base interest is switched on for Financing recourse interest from article price list on the client (see Financing fee price brackets).

When it is charged

The interest is not charged day by day. It is collected on the invoice and charged to the client as one charge, Invoice recourse interest, when the invoice is recoursed. On the row Invoice recourse interest, press the edit icon to choose when it is charged:

Choice	Interest is charged
Charge recourse interest only on recourse event	When the invoice is recoursed
Charge recourse interest on recourse event and invoice closure event	When the invoice is recoursed, and also when it is closed with interest that was not yet charged

Why the amount can differ from your calculation

Each night’s interest is rounded to two decimals, and the charge is the sum of the rounded nightly amounts. Rounding once over the whole period gives a slightly different total. For example, 0.07 a day for 14 days is 0.98, where one calculation over the whole period could give a little more or less.

Invoices financed without recourse

An invoice financed without recourse gets no recourse interest. A system setting, CALCULATE_RECOURSE_INTEREST_ON_MANUAL_RECOURSE, off by default, changes that for the Recourse action: Quiddly then charges all overdue days at the recourse rate when you recourse an invoice that was financed without recourse. The setting is listed by its code under Environment > System > Settings, where a super user can change it with Edit.

To test the interest, finance a new invoice with Use Recourse on, let it pass its due date, and wait a few nights. An invoice that was financed without recourse shows no interest.