Customer Surcharges

Knowledge Base · Accounts Receivable

Applies to: Connected 12.0+ |  Platform: macOS, Windows, Connected on Demand  

ARTICLE CONTENTS

1. Introduction
2. Surcharge Activation and Setup
   • 2.1  Activating Surcharges in the A/R Defaults
   • 2.2  Surcharge Default Revenue G/L Account
   • 2.3  Marking Surcharges as Taxable
   • 2.4  Selecting Customers for Surcharge
   • 2.5  Excluding Specific Items from the Surcharge
   • 2.6  Adding the Surcharge to the Invoice Layout (Print/PDF Version)
3. Using Surcharges
4. Sales Ledger: Surcharge Reporting
5. Surcharges Expanded
6. Related Articles

1. Introduction

Surcharges can be used for multiple purposes. For example, a percentage surcharge can be applied to a customer invoice for additional fuel costs, or to pass on payment processing fees for credit cards. Surcharges are also common when a contract price has been agreed to and unforeseen external factors, such as freight or labor costs, cause declining margins during the contract duration.

Connected can apply surcharges to customer invoices and credit memos. Customers and/or specific inventory items can be omitted from surcharge application, and surcharges can carry a custom label on screen and on printed invoice forms.

2. Surcharge Activation and Setup

There are several areas in Connected that need to be configured to use surcharges:

1. Enable in the A/R Defaults setup window.
2. Create and/or assign a new general ledger account for surcharge revenue in the A/R Accounts screen.
3. Select the customers the surcharge will apply to.
4. Select the items the surcharge will apply to.
5. Enable sales taxes on the surcharge, if applicable.
6. Update printed invoice form(s) to add the new field and labels.

2.1  Activating Surcharges in the A/R Defaults

1. Select File → Company Setup → A/R Defaults.
2. Click the Invoices tab.
3. Select the Use Subtotal Surcharge checkbox and add a Surcharge Label and Default Surcharge %, as shown below.
   
4. Click OK to save the changes and close the window.

2.2  Surcharge Default Revenue G/L Account

Once surcharges have been turned on, a default Surcharge Revenue general ledger account is required. Before this step, ensure a designated general ledger account has been created. Reference: Adding a General Ledger Account.

1. Select File → Company Setup → A/R Accounts.
2. Enter a value in the Surcharge Revenue field, as shown below.
   
3. Click Save to exit with the changes applied.

2.3  Marking Surcharges as Taxable

If the surcharge amount is subject to sales tax, each sales tax code needs to be updated.

1. Select A/R → Setup → Sales Taxes, as shown below.
   
2. Click a tax code in the list at the bottom of the window, and click Modify.
3. Select the Tax Surcharge checkbox, where applicable.
4. Click Save to confirm the changes, and repeat for any other sales taxes as needed.
   

2.4  Selecting Customers for Surcharge

When surcharges are enabled, all customers default to being omitted from charges. Each customer must first be selected to have surcharges apply.

The location of the Invoice Surcharge field in the Customers window is shown below.

If large groups of customers need to be enabled or disabled for surcharges, submit a ticket to request a utility for an import/update to check or uncheck the Invoice Surcharge field.

2.5  Excluding Specific Items from the Surcharge

When surcharges are turned on, all items default to having the surcharge apply. Specific items can be disabled, so an invoice can combine items with and without surcharges. For example, a service item or specific group of products may be omitted from surcharges.

To disable the surcharge:

1. Find an item in the Inventory Items screen, or by drilling into a list from the Item Query window.
2. Click Modify, then check or uncheck the Surcharge checkbox.
   

2.6  Adding the Surcharge to the Invoice Layout (Print/PDF Version)

After surcharges are enabled, the invoice form (printed/PDF) needs an update to include the new surcharge amount, label, and percentage.

The screen below shows an example of how to add a form field and the related three fields for surcharges. Reference: Customizing Forms for additional information on form edits.

3. Using Surcharges

Surcharges are assigned in the following ways:

• Adding an Account Invoice manually
• Shipping a Sales Order (the invoice created will include a surcharge)
• Recurring Invoices (a surcharge is applied when the invoice is created)
• Credit Memos (added manually, or from the Account Invoice window)

The surcharge field is located below the Subtotal of an invoice, before the Freight field.

The surcharge percentage can be modified up until the point when the invoice is posted.

4. Sales Ledger: Surcharge Reporting

The Sales Ledger can be used to gather information on which customers have been charged surcharges, and the amounts, during a specific sales period. This can be saved as a Connected View and reused or modified. The information in the ledger can be printed, or exported to a spreadsheet or .txt file.

References:

• Use Case: Sales Ledger
• Connected Views for Ledger/Query Windows

5. Surcharges Expanded

The surcharge feature can also be used for a different application — for example, calculating an overall discount on an invoice. If a negative value is applied, the invoice is reduced by the percentage specified, rather than increased.

6. Related Articles

• Invoice Refunds
• Customer Deposits
• Voiding a Customer Payment (Receipt)
• Processing Customer Credit Cards in Connected - CardPointe
• Connected 12.0 Update Change Log
• Handling Unexpected Inventory Cost Increases