Calculation of charges

These are the methods for calculating finance charges:

• Detail
• Net

The charges are calculated depending on the calculation method that is selected for each customer. Both methods reduce any past due amount by the total amount of open payments and credit memos as of the date you specify. Only the payments and credit memos having an on or before date are used to reduce any past due amount.

Calculation methods process open invoices and debit memos by transaction date. These are the assessment guidelines:

• If you are using the Detail method and a previous finance charge has been assessed for the open item, then the assessment date is the last finance charge date. If you are using the Detail method, a previous finance charge has not been assessed for the open item, or finance charges are being assessed using the Net method, then the assessment date is the due date of the open item plus the grace days that are defined for Customer.
• If the assessment date is before the date you have specified, then the open item is past due.

• If the open item is in dispute and the customer has not selected the Disputes Financed field in Customer, then the past due amount is reduced by the amount in dispute.