How do I add a Finance Charge to overdue customer invoices/statements
I want to charge interest on overdue invoices for several of our account holders. I have gone into "Assess Finance Charges", but not sure what to do from there. It shows in the list as having a finance charge, but when I do a Statement, there is nothing showing up on that. Any help would be appreciated.
Answers
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If you go to the Help section & type "Finance Charge" in the Search box, you'll see detailed info on what this is & exactly how RA/RAH calculates & displays it:
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Thank you Shaz. I have tried all of this, but the finance charge does not show up on the statement. Not sure what I am not doing.
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Have you set the details in your Company Preferences?:
(Check the date range on your Statement incorporates your Calculate charges from ... setting above)
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Yes I have Shaz, as per below...
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Do you have any Customers with unallocated Adjs/credits ?:
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Well as long as its in your credit agreement.
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Kim B. As alluded to by Kevin, it would be worth your while reading this article on the steps that you need to take before you start charging interest on overdue accounts:
In days gone by, it was illegal to make this interest charge without holding a lender's licence, but it seems that this requirement no longer applies as this type of charge tends to be common-place these days.
John L G
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As alluded to by John G, you need to be aware of the law surrounding money lending. You can't just decide to charge interest on overdue accounts. It doesn't work that way.
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Yes , you can charge a reasonable rate on your over due invoices and i would make the customer fully aware and the terms and conditions .
The blog posted by John from Law Path is clear on this.
I have had clients where we accrued interest on over due invoices and building loans given by a investor.
Cosmic Accounting Group
Accountants and Tax Agents 22397009
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@Zappy As John & Cosmic have pointed out, it is perfectly legal & commonplace in business to charge interest on your own overdue invoices, providing the charge is reasonable/not excessive.
It’s not the same thing as “money lending”!
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Shaz as pointed out by me, not unless it's in your credit agreement it isn't. I'm pretty sure I mentioned that bit. The national credit code applies regardless. The law is the law.
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