Annual Interest rate (%). Enter a finance charge annual interest rate in percentage.
Maximum Finance Charge. If you decide to have a minimum finance charge, enter it here in your home currency.
Grace period. Grace period refers to the number of days from the due date you will start assessing a finance charge.
Finance Charge Account. Select or create a new finance charge account, which is usually an income account.
Assess finance charges on overdue finance charges. Check this box if you want to charge a finance charge of both overdue balance and previous finance charge (compounded). Check regulatory agency before implementing.
Calculate charges from. You can either select from due date (more common) or invoice/billed date.
Mark finance charges invoices “To be printed”. When you apply a finance charge, QuickBooks creates an invoice automatically. This invoice will not be printed by default, unless you opt to print it by checking this box.
Once you set the Finance Charge preference,
• select Customers > Assess Finance Charges from the Main menu, or
• click Finance Charges icon from Customers pane on Home page,
to open Assess Finance Charges window:
A/R Account. This option only appears when you have multiple currencies, thus multiple account receivables.
Assessment Date. This is the date you want to assess the finance charge to your customers. End of the month is a popular date. You can change the date and once you move to another field, the new finance charges will be recalculated.
Finance Charge is selected in the next drop-down menu as a default template. Click Customize if you want to customize your template.
Assess column. QuickBooks automatically checks all customers with overdue balance. You can uncheck any of them manually or all of them by clicking Unmark All bar.
Customer column. Any of the customers with *(asterisk) at the left of it means you have not applied existing payments or credits to those customers. Click Cancel bar, apply existing payments or credits, and then redo this step.
Note that the minimum Finance Charge value is $10, - since we defined it in the previous Finance Charges preference.
Overdue Bal. This shows overdue balance of your customers.
Finance Charge. You can change the value of this field by moving your cursor to this cell and edit the dollar value. The only time you may want to use this feature is when you have a credit memo for your customer, but you don’t want to apply it yet.
Mark Invoices “To be Printed”. Use this option if you want to print & send finance charge invoices that is automatically created by the system.
Collection History. You may want to use this to see a history of your customer’s invoices and payments. Highlight any of the customers and click Collection History bar to open Collections Report. Below is the example of one of the customers - Bain, Chris:
Click the Assess Charges bar to finalize finance charges or Cancel if you need to go back later.