Defining Finance Charge Options

After you have added your company and set up your finance charge codes, you are ready to complete the finance charge options on Company (AR01.1). Adding a Company Defining Finance Charge Codes

Defining finance charge options, allows you to assess finance charge fees and late payment fees for a company. In this procedure, you will define the finance charges options, which includes: assigning a finance charge code, rate codes, grace days, minimum charges, and a cycle code.

To define finance charge options for the company

  1. Access Company (AR01.1), Finance tab.
  2. Define a finance charge. Use the following guidelines to enter field values:
    Charge Type & Cycle Code

    Select which type of charge you will assess the customer: Finance charge, Late Payment charges, Both, or None. Setting up finance charges

    If the Charge Type you selected includes a finance charge option, then you must define a finance charge cycle code.

    Rate Code

    Assign a rate code to default on new customers added for this company. This code contains a monthly percentage rate which is used to calculate finance charges for a customer.

    Must be a valid finance charge code in Finance Charge (AR07.1). Setting up Tax

    Calc Method

    Select a finance charge calculation method.

    • Net Finance Charges assesses one finance charge based on the net amount of overdue open items.

    • Detail Finance Charges assesses finance charges individually for each over due and paid late open item.

    Grace Days

    If you allow grace days, enter the number of days to be added to a transaction's due date before finance charges will be assessed.

    Disputes Financed

    Select whether to access finance charges on disputed invoice amounts

    Minimum Charge

    If you selected Y in the Minimum Charge Method field, define the minimum finance charge amount to be assessed. If the calculated finance charge for the customer is less than the value you define, the minimum charge will be assessed. If you selected N in the Minimum Charge Method field, leave this field blank. Customers will be assessed the calculated finance charges.

    Print Notice

    Select whether finance charge documents will be printed.

    Minimum Charge Method

    If you want to charge a minimum finance charge, select Yes.

    If you select Yes in the Minimum Charge Method field, type the minimum finance charge amount to be assessed. If the calculated finance charge for the customer is less than the value you define here, the minimum charge will be assessed.

    Last Number

    You can define the number of the last finance charge notice created. If left blank, the system begins numbering finance charge notices with 1. Finance charge notices are in the form of debit memos, and finance charge numbers begin with "FC-".

    Interest Charge by Date

    Select whether finance charges will be assessed by potentially multiple finance charge rates, over a period of time, for a past due or paid late transaction.

    Last Charge Rounding

    Interest by date charges rounding preference. If set to Y, any resulting interest charge invoices will be rounded to the nearest currency unit