Creating Monthly Finance Charges
Finance charges can be calculated on past due items. The default finance charge rate, grace period, minimum finance charge, and the option to charge negative finance charges on credits are all set in the Company Preference section (Company > Company Preferences).
The interest rate is an annual rate and entered as a whole number (e.g. 18.00). The minimum finance charge is entered as a dollar amount (e.g. $1.00).
The grace period is the number of days past the due date you wish to give before charging finance charges on them.
The option to calculate negative financecharges on credits is used if you wish the finance charge amount to be reduced if the customer has open credits on their account. If this box remains unchecked then the customer will receive finance charges on any positive past due amounts on their account regardless of the amount of credits on the account.
There is also a finance charge rate override on the Details tab of the customer master along with a check box to exclude this customer from finance charges.
The date in which an invoice starts receiving finance charges is based on the terms code assigned to that invoice along with the Grace Period days. For example I have a 30 day terms code below. Any invoice with this term would start receiving finance charges 45 days after the invoice date (30 days from the terms code plus 15 days from the grace period above). Keep in mind if there is an invoice with a term of COD that is posted to the customer account, finance charges will begin accruing from the very first day of the invoice (plus any grace period you might have).
To calculate finance charges, go to Customer > New > Finance Charge.
1. Select the date to calculate finance charges through – this is your statement date. The system uses this date along with the Terms Code on the invoice to determine if the invoice requires finance charges. Example: If the invoice is due in 30 days, the system will calculate finance charges on invoices dated 1/28 or older. If the terms code is COD but still is charged to customer account, interest accrues from the date of the invoice.
2. Finance Date Override
This field is normally left blank. If you feel you need to enter a date here, please call RIMSS Support first. It could cause finance charges to be incorrectly calculated.
3. Hit the fetch button.
4. Select All customers.
5. If you want a Memo on the finance charge documents, enter it here.
6. Click to "Calculate Selected Items".
If there are any customers you wish to not charge interest at this time, uncheck the box to the left of the customer name or zero out the amount. If you leave them unchecked, then later on decide to charge finance, it will charge finance charges all the way back to the original due date.
8. Click “Create and Save Documents” to save the finance charges.
Each finance charge is its own document. If for some reason you need to void the document, go to Customer > Find > Finance Charge.
Find the charge you are looking for. Double click on it and if it is voidable then the Void option will be available. Click Void to void this charge.
