Assessing Finance Charges
The ability to assess finance charges on past due customer invoices can help better manage past due accounts.
Enabling Finance Charges
Finance Charges must be enabled in several places to be used.
STEP 1: Turn on financial charges
1) Select Company Setup from the File menu and choose A/R Defaults.
2) Click the Customers tab.
3) Select the “Financial Charges” check box.
4) Click OK to exit and save the settings.
STEP 2: Specify Finance Charge Revenue Account
1) Select Company Setup from the File menu and choose A/R Accounts.
2) Make an entry in the “Finance Charge Revenue” field, as shown in the following screen.
3) Click OK to save the changes.
STEP 3: Enable password privileges to access financial charges.
If you are the Administrative user you will gain access to Financial Charges by default. If you are not an Admin user, access to this feature will have to be granted in the User Privileges window.
To enable the Finance Charges user privilege:
1) Select “User Privileges” from the File menu.
2) Click on the user you wish to grant the privilege to, under the “Users” list on the left.
3) Click the A/R tab and the “Other” checkbox as shown in the following screen.
4) Select the “Financial Charges” option.
5) Save your changes.
Step 4: Selecting Customers to be finance chargeable
Before finance charges can be assessed to a customer, the customer must first be selected to be included when the charges calculations are performed.
To select a customer to be chargeable:
1) Locate the customer in the Customers window and
2) Select the “Finance Charges” checkbox, as shown in the following screen and save the changes.
TIP: Use the Customer Query Window to see which customers have been marked with the assess Finance Charges checkbox.
To assess finance charges to applicable customers:
1) Select “Financial Charges” from the A/R menu or click the “Financial Charges” button in the Connected Desktop window.
The following finance charges window will appear:
2) Select the date to Assess charges as of.
3) Enter the % rate in to Apply.
4) Make an invoice selection. Chose the number of days to base the calculation on the invoice date (old) or the due date (Past Due).
NOTE: Credit Memo’s will not have charges assessed.
5) Enter a beginning invoice date so that very old invoices can be excluded, if required.
6) Choose to ignore invoices for a specific dollar amount. For example, if there are open invoices for small amounts they may be excluded from the calculation.
7) Enter the “Debit memo charge date”. This will be the date that the debit memo’s assessing the charges will be created on.
8) Click “Assess Charges” to generate a list of charges to be assessed.
9) Carefully review the list. If there are any errors, click Cancel. If the charges are correct, click Proceed.
When complete an OK message will be displayed indicating the number of Debit Memo’s created. All Debit Memos created will be unposted so each can be posted, modified, or deleted.
TIP: Use the Sales Ledger to quickly show a list of unposted Debit Memos using the following filters:
A sample of an unposted Debit Memo created from a financial charge is shown in the following screen.