Tech Note: Adjusting Finance Charges Applied to AR Invoices

Businesses may apply finance charges when customer accounts become overdue. Finance charges are added fees you impose upon your customers for nonpayment of their obligations within a specific period. Accounts Receivable’s Apply Finance Charge function provides the ability to review and manually change the calculated finance charges before they are applied to invoices.

There may be instances, however, when finance charges are applied to the incorrect AR invoices or customers, the applied finance charge rates or amounts are incorrect, or you grant a customer’s request for a lower finance charge. In these instances, it is necessary to amend or void the applied finance charges. The Adjust Finance Charge function allows you to adjust or void finance charges previously applied to customers’ past-due balances or AR invoices. This function also allows you to view the finance charge transactions and invoice adjustment history.

Article #1227: Adjusting Finance Charges Applied to Accounts Receivable Invoices discusses the procedures for assigning user access rights to the Adjust Finance Charge function and adjusting or voiding previously applied finance charges. It also discusses the relevant General Ledger (GL) entries and reports.