Set Up Finance Charges

To apply finance charges to your customers, you must first activate and set up finance charges in Default Information.

Go to the Customers & Sales Navigation Center, click the Customers navigation aid, then select Set Up Customer Defaults. On the Customer Defaults window, select the Finance Charges tab.
If you want the default setting to be to charge your customers for late payments and you'd like to set up finance charge calculations, select the Charge Finance Charge check box. Otherwise, leave the box unchecked. If it is unchecked, then, by default, Sage 50 will NOT charge any finance charges. You can override this setting for a particular customer. To do so, see the information in the Tip below.
Enter the following information:

On invoices ... days overdue: Enter the number of days overdue the invoice needs to be before you charge finance charges. This allows a grace period for your customers. This also depends on the method you use to age invoices: by invoice date or due date.

Up to ...: Enter the amount that represents the cutoff point between different annual interest rates.

Annual interest rate ...%: Enter the annual interest rate for balances that are up to the amount you entered in the previous field.

On balances above that ...%: Enter the annual interest rate for balances higher than that entered in the Up to field.

Minimum finance charge: Enter the minimum late charge you'll allow customers. If the calculated amount is less than the minimum, the program increases the amount to the minimum.
If you want to compound late charges, select Charge Interest on Finance Charges.
Select the G/L account associated with finance charge revenue (for example, "Finance Charge Income"). This is the category or "bucket" in your chart of accounts that will receive the finance charges for reporting on your Income Statement.
Select OK to save your defaults.

Tip: If finance charges are activated in Customer Defaults, every customer using standard payment terms is considered for finance charges. If there is a particular customer that you do not want to charge late fees, follow the steps below.

Select the Payment & Credit tab in the Maintain Customers window for that particular customer.
Select Customize terms for this customer in the drop-down list.
Clear the Charge Finance Charges check box.
Select the Save button to store this information in the customer record.

Set Up Finance Charges

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