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How to Calculate Finance Charges in QuickBooks

    How to Calculate Finance Charges in QuickBooks

    The finance charge is a cost-related term to borrow money. It is also referred to as an imposed fee provided to the customers with overdue payments. When the customers failed to pay on time or imposed late payments in QuickBooks. The finance charges ensure that you have enough funds for essential bill payments. The below article is rounded up with a guide to help you how to Calculate Finance Charges in QuickBooks.

    πŸ”· How Does Finance Charge Work in QuickBooks?

    A finance charge is known as the fee charged as interest granted on the customer account in the business. The invoices specify the payment terms. The invoice finance charges add the image when the payment window expired. The finance charge appears in the invoice of the customer. It must be clear. In addition to other fees, you can send many notifications to assist your customers to avoid overpayment.

    πŸ”· Accessing Calculate Finance Charges in QuickBooks Desktop

    Finance charge assessment is a component of the A/R workflow in the QuickBooks Desktop.

    Here is the list of steps to access finance charges:

    βœ… Click on the menu named Customers
    βœ… Choose Assess Finance charges option
    βœ… Select the suitable A/R Account. Make sure that the QuickBooks contains the A/R account box only if the Chart of the account contains multiple A/R
    βœ… Now adjust the Assessment date
    βœ… Choose the customers & jobs you need to assess finance charges for
    βœ… Click Assess Charges option
    βœ… Once you access the finance charge the software generates a finance charge invoice per client.
    βœ… You will get the tab to print it or clear it to appear in the next statements.

    πŸ”· Avoid a Finance Charge From Being Accessed on an Invoice

    Method 1- Generate a Job Excluded Using Finance Charges

    πŸ‘‰ Locate the menu named Customers
    πŸ‘‰ Choose the Customer Center option
    πŸ‘‰ Click the customer then select Add job using drop-down appears at the upper left corner
    πŸ‘‰ Fill Customer Name-No FC in the field named Job Name
    πŸ‘‰ Click OK
    πŸ‘‰ Now edit the invoice and then modify the customer to the just created customer
    πŸ‘‰ Click Save & Close option
    πŸ‘‰ Hit on the menu named Customers then choose Assess Finance Charges
    πŸ‘‰ You can now choose once invoices you need to set finance charges without selecting the invoice of the new job

    Method 2- Make a Second Accounts Receivable that You Can Exclude Using Finance Charges

    πŸ‘‰ Open the Company menu
    πŸ‘‰ Click Chart of Accounts
    πŸ‘‰ It will display a chart of accounts window and then give a right-click on where on it
    πŸ‘‰ Select New button
    πŸ‘‰ Choose Other Account Types then click Accounts Receivable using the drop-down
    πŸ‘‰ Click Continue tab
    πŸ‘‰ Write” Accounts Receivable –No FC” in the field named Account Name
    πŸ‘‰ Choose Save & Close
    πŸ‘‰ Now edit any existing invoices you would like excluded from the finance charges then choose the New A/R Account
    πŸ‘‰ Once you edit or generate an invoice you can select the A/R account you need to use
    πŸ‘‰ If you locate the Customers option then click Assess Finance charge you will need the option to choose which A/R you need to use to access finance charges

    Method 3- Set up Finance Charge Preferences in QuickBooks Desktop for Windows

    πŸ‘‰ Initially Login to the QuickBooks company file with Admin credentials
    πŸ‘‰ Locate the menu labeled Edit then choose Preferences
    πŸ‘‰ Choose the Finance Charge option
    πŸ‘‰ Click tab which says Company preferences
    πŸ‘‰ Enter into the fields named Annual Interest rate, Grace period days, or Minimum Finance charge
    πŸ‘‰ Click on the drop-down named Finance charge account to choose the account you need to monitor income using finance charges
    πŸ‘‰ Choose the suitable radio button for invoice date or due date to determine the time you need QuickBooks to calculate the finance charges
    πŸ‘‰ Click on the checkbox named Mark finance charge invoices “To be printed” if you need to print the finance charge invoices.
    πŸ‘‰ In case you send statements then clear the checkbox.
    πŸ‘‰ The QuickBooks will contain the finance charges on the next statement to the customer.
    πŸ‘‰ Hit OK.

    Read More:

    How Do you Record a Loan Payment for Fixed Asset in QuickBooks

    πŸ”· Closure:

    Who wants to view their bills rise into higher bills. Hopefully, now you have a great understanding of the procedure to Calculate Finance Charges in QuickBooks and can manage the amount owes. If you need to know more about the process to evaluate the dept and interest then get connected to the professional team.

    For Free Consultation With QuickBooks Experts: Just Call or Chat With Us


    Frequently Asked Questions

    ➀ How would I know the finance charge in the invoices in QuickBooks Desktop?

    ↬ Click File button
    ↬ Choose Print forms
    ↬ Click invoices
    ↬ You will view the number of the finance charge invoices

    ➀ What If I need to access a finance charge in QuickBooks Desktop?

    ↬ Once you are prepared then click on the menu named customers
    ↬ Click Access Finance charges
    ↬ It will display the window
    ↬ Ensure the Assessment date has been set correctly
    ↬ Clear the field named Mark invoices β€œto be printed”
    ↬ Hit Assess Charges

    ➀ How would I run the Finance charge report in QuickBooks Desktop?

    ↬ Locate the Reports tab
    ↬ Click the Report Center option
    ↬ Write the finance charge into the search box
    ↬ Hit the Run button to launch the report

    ➀ Can I export the finance charge report in QuickBooks?

    Yes can open the finance charge report and also export it to excel to view the required data

    ➀ How would I set up finance charges preferences in QuickBooks Desktop for Mac?

    ↬ Click on the QuickBooks then choose the Preferences tab
    ↬ Choose the Finance Charges tab
    ↬ Fill in the finance charge information for a field named Annual interest rate%, Grace period, or Minimum finance charge.
    ↬ You can fill a title named finance charge

    Now set the date if you need to begin assessing finance charges with below:
    ↬ Billed Date
    ↬ Due date
    ↬ Select the account to monitor tracking using finance charges
    ↬ Choose check box named Mark finance charge invoices to be printed
    ↬ If you send a statement give blank the checkbox

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