Overview
The Finance Charges allow charging customers when they are in arrears during a certain period of time.
The first step is to enable the Finance Charges Setting. This setting can be enabled from company level (or per location, in the case of Multilocation Companies). The system allows generating Finance Charges either manually or automatically. If you enabled the automatic generation of Finance Charges, it will apply to all the customers, however, it is possible to make exceptions and apply a different charge (or none) to any specific customer in Customer Account "Advanced" Setup (exceptions per customer also apply to Finance Charges manually generated).
How does this work?
In the following example, we are going to set up the finance charges as follows by company level:
Please go to Setup>>Settings and click on Finance Charges. Enable the Finance Charges setting and choose how you want to generate Finance Charges.
In the following example, we select the option " automatically", with this configuration:
We are currently on September 13th. As we can see in the next image, the customer "Alzate" has accrued €124.00 during the month of July.
Since we set up a period of 31-60, the system will search for the total amount due during that period of older (61-90 and >90) as follows:
€124.00 (July) + €737.66 (May)= € 861,66.
€ 861,66 is the total due during the period and older, the system will deduct the Open Credits of the customer (in any period) prior calculating the Finance Charge. Since we set up a percentage of 10% and there were not open credits, the system generated an invoice for this customer for an amount of €86,17. The invoice can be printed from Order Summary. Notice the carrier name is No Carrier.
Download here an example of how a Financial Charges invoice will look like. Notice the Finance Charge indicator on the fields description, PO#, Way Bill/Ref #.
In this example, we set up as the manual generation of Finance Charges:
We want to generate a Finance Charge for the customer "Anthony Palacio".
1) We go to Accounts Receivables>>Aging/Statements and click on Generate Finance Charges.
2) The system opens the Finance Charges Processing window where the system displays all the customers who have open invoices for the current date on the selected period.The next step is to select the customers we want to apply Finance Charges to. Please consider that if you check the first box, the system will charge all the customers found (for all the pages). The customer Anthony Palacio owns $620.80 since the selected period was 61-90. Even though for that period the amount due was $0, the system will consider the older periods. Keep in mind that the system will deduct the Open Credits of the customer (in any period) prior calculating the Finance Charge. Since we set up a percentage of 10% and there were not open credits, the system generated an invoice for this customer for an amount of $62.08.
3) Once we click on Process Finance Charges, a confirmation message will appear, click on Continue to finish.
4) A success message appears at the bottom right-hand corner of the screen and invoices will be available from the Order Summary screen.
Important
Finance Charges Generation button is independent of other actions and filters available on the Aging/Statements screen. To generate Finance Charges please follow the above-explained instructions.
Invoices generated for Finance Charge can be easily identified in the Order Summary Screen since those orders will have a indicator.
Notice you also will be able to identify easily an order generated by Finance Charges in the Order Summary screen. The PO # column will have a message "Finance Charge" instead of the PO #.
Information
If any Finance Charges are pending from bills to be paid, the system will disregard them when generating a second fee for the same reason.