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Level 1

How do I charge interest charges to overdue invoices?

Want to be able to charge an interest rate on overdue invoices, how do I do that?

6 Comments
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QuickBooks Team
QuickBooks Team

How do I charge interest charges to overdue invoices?

Great to have you here, Agnes.

I appreciate you checking in with us. Helping out with charging the overdue invoices is my priority.

You can charge an interest to an overdue invoices by adding a finance charge to the transaction. First, we need to create an item for the finance charge. 

Here's how:

  1. Go to the Gear icon.
  2. Select Products and Services.
  3. Click New.
  4. Select Service.
  5. Enter the name, such as finance charges.
  6. Enter the price/rate.
  7. Select the Income Account to track how much you receive in finance charges. If the income account is not listed, you can just type the name, press Enter, and complete the New Account interview: Income for the account type and Service/fee income for the income account type.
  8. Click Save.

After creating an item, let's open the overdue invoices and add the finance charge item that you've set up. Next, you'll need to enter the finance charge amount and click Save and close.

This helps you apply a charge interest on the overdue invoices in QBO. Please know that I'm just a post away if you need anything else. Wishing you continued success.

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Level 1

How do I charge interest charges to overdue invoices?

Why not use the Assess Charges function? Also, would this be the same in QB Desktop 2016?
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Level 1

How do I charge interest charges to overdue invoices?

I have a serious problem from a regulatory/good practice point of view with suggesting to go back and amend an invoice. The moment that invoice is saved and sent it is a legally binding document and should not be amended. In South Africa it is called fraud if you do so.

I love the thorough answer and it is good, un until suggesting to amend the original invoice. Make a fresh invoice!
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Level 1

How do I charge interest charges to overdue invoices?

that function is not available on QBO, only on Desktop. Intuit should separate these discussion and help forums more clearly to prevent confusion!

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Level 1

How do I charge interest charges to overdue invoices?

Other software programs, e.g. Sage, calculate the interest automatically, but it appears with QB it is a manual calculation and then you need to input it.  Is this correct?

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Level 1

How do I charge interest charges to overdue invoices?

Yes, you're correct. It's stupid and should be dealing with interest automatically like every other accounting package.