Important: DDI recommends generating Finance Charges automatically through the End of Month Job Stream. See Customer statements & finance charges.
Finance Charges are generated on past due Accounts Receivable balances and should be updated at the end of each month. There are multiple settings that affect how these charges are generated. You can choose to have your charges generated and posted directly to customer accounts, or you can set the system to create separate invoices that can be adjusted before they are posted from the Invoicing screen. When the charges are generated, the Invoice Date, Due Date and Discount Date will all be the date that the update is run.
These options should be discussed with a Customer Care representative prior to your first Finance Charge Update.
WARNING! Do NOT generate your Finance Charges multiple times, as they will duplicate.
- Go to Accounting > Accounts Receivable > Finance Charge Update.
You will see the date that your last finance charges were generated, as well as the current Source 'FC' Accounting Period that you are about to generate charges for. Do NOT generate finance charges more than once in the same period, as the charges will duplicate.
- Select the Period Ending Date.
- Choose how to calculate finance charges from the Finance Charges Based On: list. This value is set in Company Master, but you may change it.
- Invoice Date ages each item individually when paired with Individual Aging in the Company Master.
- Due Date collectively ages the entire monthly balance when paired with Monthly Aging in the Company Master.
- The Number of Days Past Invoice/Due Dateis based on the specification in the option above. Type a number of days to allow a “grace period” before assessing a charge. Enter 0 days to begin calculating charges immediately after the due date.
- If previous unpaid finance charges should be included in the overdue balance, select the Apply to Previous Finance Charges check box.
- To ensure that all balances (debit and credit) are considered before adding a finance charge, select the Apply to Credit Memos check box. It will not result in negative finance charges. If this option is cleared, then customers will be penalized based on debit balances only and risk being overcharged.
- Type a Minimum Finance Charge Dollars to Generate. For example, entering $1.00 for a system that calculates an 18% annual rate (1.5% monthly) will result in accounts with overdue balances under $66.67 not being considered.
- You can now calculate and post the charges; however, note that this process is irreversible once started. Any reversals will need to be done manually. When you are read to calculate and post the charges, click Update.Click Update.
You will see the Total Finance Charges that you have generated in this update; click OK in this window.
When prompted to print the Finance Charge Journal, click Yes to print. If you choose no, you will not print the journal, but you updates will be saved.