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Finance charges

To set up finance charges

1. Specify the default nominal accounts for your finance charges in the Nominal Ledger.

   Open: Nominal Ledger > Utilities > Ledger Set Up > Default Nominal Accounts.

   1. Select a nominal account to use for Finance Charges.
2. Set up the finance charges in the Sales Ledger Settings Processing tab.

   Open: Sales Ledger > Utilities > Ledger Set Up > Ledger Settings | Processing.
   

   If you want to add interest or finance charges to overdue unpaid invoices, you can specify the interest charge rates that you want to use here.

   When you want to charge a customer interest on their overdue invoices, you assign a Charge index code to the relevant customer accounts on the account Credit tab.

   There are 20 Charge Index codes.

   • Enter the Percentage Charge you want to use for as many Charge Indexes you want to use. Leave the remaining Percentage Charges as 0.
   • Select Charge compound interest on finance charges to add interest to finance charges already calculated on any remaining overdue debts.

   Once you have specified the interest rates that you want to use and added the required interest rates to your customer accounts, you can generate your finance charges. This allows you to add interest to any overdue invoices.

   Where interest is added, invoice transactions are added to the customer's account with the query flag set to F, and the reference as FIN CHARGE.

3. Choose to use finance charges on the customer's account.

   Open: Sales Ledger > Sales Accounts > Amend Account | Credit.

   1. Select Finance Charges to add interest charges to the account.
   2. Select the percentage charge you want to apply from the drop-down list.

To apply finance charges

Open: Sales Ledger > Period End Routines > Finance Charges.

1. Select Apply Finance Charges.

2. Enter the Charge date to appear on invoice.

   This date is used to post the finance charge transaction. The date entered should not be after the end of the current period.

3. Enter the date up that you want to include invoices up to (Include invoices with due date up to). This date should not be after the end of the current period.
4. Filter the list of entries displayed using the Selection criteria to show All Transactions, or transactions By date range, By customer range, or By finance charge rate.

A list of outstanding transactions potentially requiring finance charges is displayed.

5. Select the transactions that you want to add finance charges to:
   • To select all the transactions, click Select all.
   • To select individual transactions, click the check box to the left of the transaction.
6. To print a list of finance charges, without adding the charges to the customers account, click Print.

7. To apply and post finance charges to the customer's account, click Generate.

   This also prints a list of all finance charges.

To reverse finance charges

Open: Period End Routines > Finance Charges.

1. Select Reverse Finance Charges.

2. Enter the Charge date to appear on invoice.

   This date is used to post the finance charge transaction.

3. Filter the list of entries displayed using the Selection criteria to show All Transactions, or transactions By date range, By customer range, or By finance charge rate.

   A list of finance charges is displayed.

4. Select the finance charges that you want to reverse:
   • To select all the transactions, click Select all.
   • To select individual transactions, click the check box to the left of the transaction.
5. To print a list of finance charges to be reversed, without reversing the charge on the customer's account, click Print.

6. To reverse and post the finance charges to the customer's account, click Generate.

   This also prints a list of the reversed finance charges.

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