How do most people’s systems handle interest only billing? We send bills 15 days before the bill date but in order to generate bills it forecasts the interest which depending on what happens to the balance may be more or less than the interest on the due date.

If I remember correctly, our system also forecasts the interest and if the balance changes so it affects interest, it will make adjustments on the next bill.

Don't forget to read the loan contract to make sure you are servicing the loan according to the legal obligation.

I guess that is what is my concern as the note says that interest outstanding is due on the due date but the only way to provide advance billing is to forecast.

Sounds like you have a mismatch between your notes and your servicing.