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CALCULATING FINANCE CHARGES.
The rate for the charge is defined in Customer Class file as either a % amount or a $ amount.
Charges must be assessed prior to closing the month.
Only Open Invoices will be assessed for charges.
The finance charge transactions are posted to current transaction file.
Charges appear on customer statements and aged receivables report.
Charges are given a date as the date you assess the charge, this date is used as the posting date for GL.
Payments will be applied as follows :
Open item customers : Apply payments to invoices and charges as required.
Balance forward customers : Payment is applied to finance charges first and then to invoices.
Calculation.
The assess finance charge flag in the Customer file must be set to Y.
In the same file the % or $ amount is defined.
Calculated as follows :
Balance outstanding x %/$ x Days outstanding / 365.
The days outstanding is the difference between the assessment date and the due date,
( the due date is as defined in the terms file ).
Eligibility.
1. If the due date is greater than the assessment date there is no charge.
2. If the due date is less than the assessment date the following happens :
The due date is compared to the last finance charge date in Automatic Numbering
file, if the due date is prior to the last finance charge date then charges are only assessed
on the period between the last finance charge date and the assessment date.
