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Assess finance charges

 

Assessing finance charges is part of your usual A/R workflow in QuickBooks Desktop. To see the complete list of workflows and other customer-related transactions, refer to Accounts Receivable workflows in QuickBooks Desktop

Learn how to assess finance charges in QuickBooks Desktop for Windows and Mac, and how to prevent a finance charge from being assessed on an invoice.

Assess finance charge

  1. Go to the Customers menu, then select Assess Finance Charges.
  2. Choose the appropriate A/R account. Note that QuickBooks displays the A/R Account field ONLY when your Chart of Accounts contains more than one A/R.
  3. Set the Assessment date.
  4. Select the customers and jobs you want to assess finance charges for.
  5. Select Assess Charges.
    Note: When you assess finance charge, QuickBooks creates a Finance Charge Invoice per customer. You have the option to print it or leave it cleared to be included in your next statements.

Prevent a finance charge from being assessed on an invoice

There are two methods available if you want an invoice to be excluded from a customer balance when assessing finance charges.

Option 1: Create a job that's excluded from finance charges

  1. Go to the Customers menu, then select Customer Center.
  2. Select the customer, then choose Add Job from the drop-down at the upper left.
  3. In the Job Name field, enter Customer Name - No FC. Select OK.
  4. Edit the invoice and change the customer to the job you just created.
  5. Select Save & Close.
  6. Go to the Customers menu, then select Assess Finance Charges.
  7. You can now select which invoices you want to apply finance charges to without choosing the new job's invoice.

Option 2: Create a second Accounts Receivable that you can exclude from finance charges

  1. Go to the Company menu, then select Chart of Accounts.
  2. In the Chart of Accounts window, right-click anywhere, then choose New.
  3. Select Other Account Types, then select Accounts Receivable from the drop-down.
  4. Select Continue.
  5. In the Account Name field, enter Accounts Receivable - No FC.
  6. Select Save & Close.
  7. Edit any existing invoices you would like to exclude from finance charges, then select the new A/R account.
    • When you create or edit invoices, you can now choose which A/R account you like to use.
    • When you go to the Customers menu then select Assess Finance Charge, you will have the option to select which A/R you want to use to assess finance charges.

QuickBooks Desktop for Windows

Before you start assessing finance charges, you need to set up your Finance Charge preferences.

  1. Log in to the QuickBooks company file as Admin.
  2. Go to the Edit menu, then select Preferences.
  3. Select Finance Charge, then go to the Company Preferences tab.
  4. Fill in the Annual Interest Rate (%), Minimum Finance Charge, and Grace Period (days) fields.
  5. From the Finance Charge Account drop-down, select the account you use to track income from finance charges.
  6. (Optional) If you don't want QuickBooks to assess finance charges on overdue finance charges, clear the Assess overdue finance charges checkbox.Note: Laws vary about whether you can charge interest on overdue interest payments. Confirm with the appropriate jurisdiction that you are in compliance with that jurisdiction's lending laws.
  7. Select the appropriate radio button for due date or invoice/billed date to indicate when you want QuickBooks to calculate finance charges.
  8. (Optional) Select the Mark finance charge invoices as "To be printed" checkbox if you want to print all your finance charge invoices in a single operation. If you send statements, leave this checkbox cleared. QuickBooks will include the finance charges on the next statement to the customer.
  9. Select OK.
  1. Go to the Customers menu, then select Assess Finance Charges.
  2. Choose the appropriate A/R account. Note that QuickBooks displays the A/R Account field ONLY when your Chart of Accounts contains more than one A/R.
  3. Set the Assessment date.
  4. Select the customers and jobs you want to assess finance charges for.
  5. Select Assess Charges.Note: When you assess finance charge, QuickBooks creates a Finance Charge Invoice per customer. You have the option to print it or leave it cleared to be included in your next statements.

There are two methods available if you want an invoice to be excluded from a customer balance when assessing finance charges.

Option 1: Create a job that's excluded from finance charges

  1. Go to the Customers menu, then select Customer Center.
  2. Select the customer, then choose Add Job from the drop-down at the upper left.
  3. In the Job Name field, enter Customer Name - No FC. Select OK.
  4. Edit the invoice and change the customer to the job you just created.
  5. Select Save & Close.
  6. Go to the Customers menu, then select Assess Finance Charges.
  7. You can now select which invoices you want to apply finance charges to without choosing the new job's invoice.

Option 2: Create a second Accounts Receivable that you can exclude from finance charges

  1. Go to the Company menu, then select Chart of Accounts.
  2. In the Chart of Accounts window, right-click anywhere, then choose New.
  3. Select Other Account Types, then select Accounts Receivable from the drop-down.
  4. Select Continue.
  5. In the Account Name field, enter Accounts Receivable - No FC.
  6. Select Save & Close.
  7. Edit any existing invoices you would like to exclude from finance charges, then select the new A/R account.
    • When you create or edit invoices, you can now choose which A/R account you like to use.

When you go to the Customers menu then select Assess Finance Charge, you will have the option to select which A/R you want to use to assess finance charges.

QuickBooks Desktop for Mac

Set up finance charges preferences for QuickBooks to assess finance charges with any customers whose payments are late. Here's how.

  1. Go to QuickBooks, then select Preferences.
  2. Select Finance Charges. Enter your finance charge information for Annual interest rate %, Minimum finance charge, Grace period (days).
  3. (Optional) You can enter a finance charge title.
  4. Set the date when you want to start assessing finance charges.
    • Due date
    • Invoiced/Billed Date
  5. Choose the account to track income from finance charges.
  6. (Optional) If you don't want to assess finance charges on overdue finance charges, clear the checkbox for it.
  7. (Optional) To print your finance charge invoices to send to customers, select Mark finance charge invoices To be printed checkbox. If you send statements, leave this checkbox.
  1. Go to Customers, then select Assess Finance Charge.
  2. From the Assess column, select the customer and job which you want to assess finance charges.
  3. (Optional) Change any finance charge amount by typing over the amounts shown in the Finance Charge column. To change the interest rate, select Settings and enter the new rate.
  4. (Optional) If you plan to print the finance charge invoices to send to customers, select the Mark invoices To be printed checkbox. If you send statements, leave this checkbox cleared.

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