Finance Charges

Many businesses charge late fees or finance charges on invoices that are overdue. This allows business owners to recover costs incurred by carrying unpaid bills on their books. Finance charges are usually calculated on a monthly basis for all transactions that meet the criteria set up by the business owner.

To set up finance changes, go to Setup > Accounting > Preferences > Finance Charge Preferences (Administrator) (Administrator).

After the finance charge process is set up, you can begin to assess charges. To do this, go to Transactions > Customers > Assess Finance Charges (Administrator) (Administrator).

Note: All of the navigation paths in this information use the Administrator role.

Setting Up Finance Charges

Many businesses charge late fees or finance charges on overdue invoices. This allows business owners to recover costs incurred by carrying unpaid bills on their books. Finance charges are usually calculated on a monthly basis.

To set up finance charges:

1. Go to Setup > Accounting > Preferences > Finance Charge Preferences (Administrator).
2. In the Annual Rate % field, specify the annual percentage rate of interest we charge on unpaid balances.
3. In the Income Account field, use the dropdown list to select the income account that will be credited by this finance charge.
4. In the Grace Period field, enter the number of days we allow from the due date of an invoice before we begin to assess finance charges.
5. In the Minimum Finance Charge field, enter the minimum finance charge you apply.
6. In the Assess on Finance Charges field, place a checkmark in the box if we assess finance charges on previously assessed unpaid finance charges.
7. In the Assess From field, chose one:
   • Due Date if we begin to assess finance charges only when an invoice is due
   • Transaction Date if we begin to assess finance charges from the date of the transaction
8. In the Custom Form field, use the dropdown list to select the form on which we would like to invoice finance charges. Most companies choose the Standard Finance Charge Invoice but we can customize the Finance Charge Invoice.
9. When we have finished, click Save.

Note: We can update our finance charge settings by going to Setup > Accounting > Preferences > Finance Charge Preferences (Administrator). We cannot change finance charge settings by going to Lists > Accounting > Items (Administrator).

Note: On Finance Charge transactions, the tax code is always “Non-Taxable” regardless of any settings and default tax codes.

Assessing Finance Charges

Before we can assess finance charges in NetSuite, we must first set up the details of how we charge them. To set up finance changes, go to Setup > Accounting > Preferences > Finance Charge Preferences (Administrator).

To assess finance charges:

1. Go to Transactions > Customers > Assess Finance Charges (Administrator).
2. Accept today’s date for the transaction, or enter another. The Amount field updates to show the total finance charges we are assessing. Amounts in currencies other than our base currency are converted to our base currency for this total. Note: We can only assess finance charges for a customer one time per day even if subsequent charges would be in different currencies than the first finance charge.
3. Choose to print, email, or fax the finance charge invoices. In the fields To Be Printed, To Be Emailed, and To Be Faxed, set your preferences for sending the completed form. We can make a selection in each field individually.
   • Select Yes if we want to send the form using the method indicated. For example, select Yes in the To Be Faxed field to fax the form.
   • Select No if you do NOT want to send the form using the method indicated. For example, select No in the To Be Emailed field to not email the form.
   • Select Respect Customer Preference to send the form based on the default preference on the customer record. For example, if the customer’s record indicates to send forms via fax, then the completed form is faxed. We can set the preference on the Info subtab of a customer record in the Send Transactions Via field.
4. Check the box in front of each customer account on which we want to assess finance charges. We can manually adjust the amount we want to assess for each customer. If we use the Multiple Currencies feature, each customer with an outstanding finance charge appears in the list one time for each currency in which they have a finance charge. 
5. Click Save.