This program can automatically add a charge to the customer’s account for late payment of invoices. This charge is a percentage of the total amount due on each invoice that is past due. This percentage is the FINANCE CHARGE PERCENTAGE set in Setup Sales Order Options.

This program makes permanent changes to your accounts receivable files. Please read the following section completely and heed all warnings before proceeding!

Procedure

1. Go to the Customers Browse
2. Click Print|Finance Charges (you may be asked to supply your Master Password.)
3. Select the Customers to generate Finance Charges for. This is similar to the selection process for Customer Statements. You may select one Customer, All Eligible or only tagged Customers.
4. Click [OK] to proceed. A single sales order will be generated for every customer with a past due balance. Each of these sales orders has a single line item labelled ‘FINANCE CHARGES’.
5. Once the transactions are generated, you are asked if you wish to generate (and print) invoices for these orders. If not, you can go back and print them individually from the Sales Orders browse whenever you wish, however, unlike other sales orders you may not alter them.

Notes

• You can only run this program once per month. Once run, you will not be allowed to run this program again until after the next Period Update.
• Finance charges may only be cleared from a customer account in A/R|Customer Payments by substituting a Bad Debt Expense account for the usual Cash Receipts account in the header, and applying the amount to be written off to your Receivables account using the appropriate transaction.
• One transaction is entered to each applicable customer’s list of receivables due. The transaction is assigned a sequential invoice number, with the description: ‘FINANCE CHARGES COMPUTED AT xx.xx PERCENT ON $xxxxx.xx PAST DUE’
• Finance charges are only computed based on open invoices. Finance charges are not calculated using pre-existing open finance charges.
• Finance Charges begin accruing from the date each invoice is due. You can offer all customers a Grace Period (a number of days after the due date before Finance Charges will be calculated on an invoice) in the Custom Settings section of Security Extensions.

If you have a Grace Period, the starting date used to calculate the Finance Charge remains the date the invoice was due.

Your terms are Net 10. But you have a Grace Period set to 30 Days. This means that the invoice will not trigger a finance charge until it is forty one (41) days old. Customer ABC has two open invoices: One which is 18 days old and one which is 55 days old. The first invoice will not be subject to Finance Charges since it falls within the Grace Period. However the second invoice will and the Finance Charge will be calculated based on 45 days.