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Kimberly2
Level 1

interest charges on a statement

How do you add interest on your statements

 

 

6 Comments 6
Rasa-LilaM
QuickBooks Team

interest charges on a statement

Good day, Kimberly2.


Welcome to the Online Community. I’ll be sure to point you in the right direction about adding interest charges on the statement.

 

Since there’s not a direct way of adding these items on a statement, you can either create a separate  invoice or add the charges on an existing invoice. To begin, create the interest charges item in your account.

 

Here's how:

 

  1. Go to the Gear icon at the top, and select Products and Services.
  2. In the Products and Services window, select New.
  3. Select the product or service type.
  4. Enter the name such as Interest charges.
  5. Fill in the field boxes.
  6. Once done, click on Save and close.

To record the charges, check out this article for the step by step process: How to enter late fees on invoices. Once you create a statement, the interest amount will automatically show on the transaction.

 

I've attached an article that will help manage your statements efficiently: Create Statements.

 

By following the resolution steps,you'll be able to see the interest charges added on the statement.

 

Feel free to leave a comment below if you have questions about working QBO. I'll be around to help. Have a great rest of your day.

JAR2020
Level 1

interest charges on a statement

How do you record interest on on all overdue accounts without doing to separately

MichelleBh
Moderator

interest charges on a statement

Thanks for joining on this thread, @JAR2020.

 

It would be my pleasure to walk you through the step-by-step instructions on how to record interest to the overdue accounts without doing separately in QuickBooks Online. 

 

First, if you haven't created an interest item yet, let's go ahead and create it. 

 

Here's how:

 

  1. Click the Gear icon, then choose Products and Services.
  2. Tap New.
  3. Select either Non-inventory or Service.
  4. Enter the desired name of the interest.
  5. From the Category ▼ dropdown, select the category that fit defines the fee. 
  6. Hit Save and close.

 

Once done, if you haven't sent the invoices yet, you can add the fee as a line item to the existing invoice. Let me guide you how: 

 

  1. Go to Sales, then go to the Customers tab.
  2. Choose the customer, then look for the past due invoice.
  3. Add the interest item in the unused line, then enter the amount.
  4. Tap Save and send or Save and close.

latefees2.PNG

 

On the other hand, if the invoices are already sent, you'll need to create a new invoice to add the fee to what my colleague mentioned above. 

 

Here's how: 

 

  1. Click the Plus sign (+) icon, then choose Invoice.
  2. Under the PRODUCT/SERVICE column, add the interest item.
  3. Enter the amount manually in the AMOUNT tab.
  4. Tap Save and send or Save and close.

 

You also have an option to set up automatic late fees to your invoices. So QuickBooks can apply them automatically. Let's turn on the late fees feature first by going to the Settings, then select Account and Settings. After, choose the Sales tab and turn on the radio button under the Late fees field. 

 

 

For more details, browse this article: Set up and apply automatic late fees to invoices. 

 

You can always access any customer's reports to review the transactions you've made, then customize it to show the specific parts. 

 

Additionally, I've attached an article about how to personalize sales forms and add the info that implies most to your business. 

 

 

Let me know if you have follow-up questions. I'm glad to assist. Have a great day!

dLearned
Level 5

interest charges on a statement

I've sent in feedback on this, but want to comment on the thread for others to see.

 

Using the automatic interest has 2 significant drawbacks:

1.  There is no way to opt individual clients out of the process.  For example, if we have customers that we will never want to charge interest on, that is not an option.  All or none.

2.  There is no way to extend the grace period beyond 30 days.  We do not want to charge interest until the invoice is 90 days (our large customers complex processes mean we are paid at around 60 days, not 30, so interest would not be appropriate at 60 days).  The only workaround is to change our due dates.

 

The only other option for us is to do an invoice each month for interest, which means not only manually creating an invoice, but also doing manual calculations rather than having the percentage calculated.  This is extremely tedious and open to error.

HeatherMarie1
Level 3

interest charges on a statement

Is there a way to automatically have interest added to past due accounts with a specific item or service?

MichelleBh
Moderator

interest charges on a statement

I have answer to your late fees question, @HeatherMarie1

 

I'll share some information on how the late fees apply to the past due invoices in QuickBooks Online. This way, I can guide you accordingly in managing your sales transactions. 

 

QuickBooks only calculates and applies late fees to overdue invoices the day after you turn on the late fee setting. For example, you turned on late fees on 05/10/2023. Then only those past due on 5/10/2023 and moving forward will have late fees (depending on the grace period you set). This means that any existing past-due invoices won't have late fees enabled for them.

 

You can tell if an invoice is eligible when you open it. In the header, under the due date, you'll see this:

 

For invoices created after late fees in QuickBooks Online were enabled, you'll see this:

 

Once you enable late fees, when you do encounter a customer with a past due invoice, you'll see that invoice automatically updated with late fees added as a line item.

 

But no worries, you can still manually apply late fees as a line item on older invoices. You can refer to the steps I've outlined above. 

 

In addition, if you want to check your late fee amount, you can go to your Chart of Accounts and search Late Fee Income. Refer to the sample screenshot below: 

 

Moreover, check out the following articles below to learn how to edit the default late fee settings and send invoice reminders in QuickBooks:

 

 

You can reply directly in this thread if you have additional questions about late fees in QuickBooks. I'd be willing to lend you a hand. Keep safe. 

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