The Finance Parameters control the way Finance Charges are calculated in Accounts Receivable.
- The Annual Percentage Rate for Finance Charges. This is the rate that Customer is charged for overdue Invoices. To charge 24% per year (APR), for instance, enter 24. 24% per year equals 2.0% per month.
- May be set to either # of Days or Monthly (the Monthly setting is available only with Keystroke Advanced licenses).
When set to # of Days, the Days in Period settings are used to group unpaid Invoices and Finance Charges by relative age. Period 0 is the current period. Period 1 is the period before the current period. Period 2 is the period before Period 1.
When set to Monthly:
- Period 0 = 30 The past 30 days.
- Period 1 = 30 30 - 60 days ago.
- Period 2 = 30 60 - 90 days ago.
- Older than Period 2 - Over 90 days ago.
- The number of days past the Invoice Date where there will be no Finance Charges calculated.
Positive number: The length of the Grace Period. Finance Charges are calculated from the end of the Grace Period. For example, if the Grace Period = 10, Finance Charges start 10 days after the Invoice date. No Finance Charge if the Customer pays off the Invoice within 10 days.
Zero (0): No Grace Period. Finance Charges are calculated from the Invoice date.
Negative 1 (-1): Finance Charges apply only to Invoices prior to the Billing period's Open Date. Calculates Finance Charges based on the Open Date.
A Negative Number (other than -1): The length of the Grace Period. Finance Charges ar calculated from the Invoice date. For example, if the Grace Period = -10, Finance Charges start from the Invoice date.
Note: A Customer's Grace Period can over-ride the Grace Period set in Accounts Receivables unless the Customer's Grace Period is set to 0. Individual Customer Grace Periods are defined on the Customer database record.
- If the calculated Finance Charge is less than the Minimum Charge, the Customer pays the Minimum Charge. This charge is not added to the Finance Charge, it is just a simple minimum charge.
No Interest on Finance Charges
- When enabled, Finance Charges are not calculated on any existing Finance Charges (e.g. does not calculate Compound Interest).
Accounts Receivable Contents