Assessing finance charges is part of your usual A/R workflow in QuickBooks Desktop. To see the complete list of workflows and other customer-related transactions, refer to Accounts Receivable workflows in QuickBooks Desktop |
Learn how to assess finance charges in QuickBooks Desktop for Windows and Mac, and how to prevent a finance charge from being assessed on an invoice.
Assess finance charge
- Go to the Customers menu, then select Assess Finance Charges.
- Choose the appropriate A/R account. Note that QuickBooks displays the A/R Account field ONLY when your Chart of Accounts contains more than one A/R.
- Set the Assessment date.
- Select the customers and jobs you want to assess finance charges for.
- Select Assess Charges.
Note: When you assess finance charge, QuickBooks creates a Finance Charge Invoice per customer. You have the option to print it or leave it cleared to be included in your next statements.
Prevent a finance charge from being assessed on an invoice
There are two methods available if you want an invoice to be excluded from a customer balance when assessing finance charges.
Option 1: Create a job that's excluded from finance charges
- Go to the Customers menu, then select Customer Center.
- Select the customer, then choose Add Job from the drop-down at the upper left.
- In the Job Name field, enter Customer Name - No FC. Select OK.
- Edit the invoice and change the customer to the job you just created.
- Select Save & Close.
- Go to the Customers menu, then select Assess Finance Charges.
- You can now select which invoices you want to apply finance charges to without choosing the new job's invoice.
Option 2: Create a second Accounts Receivable that you can exclude from finance charges
- Go to the Company menu, then select Chart of Accounts.
- In the Chart of Accounts window, right-click anywhere, then choose New.
- Select Other Account Types, then select Accounts Receivable from the drop-down.
- Select Continue.
- In the Account Name field, enter Accounts Receivable - No FC.
- Select Save & Close.
- Edit any existing invoices you would like to exclude from finance charges, then select the new A/R account.
- When you create or edit invoices, you can now choose which A/R account you like to use.
- When you go to the Customers menu then select Assess Finance Charge, you will have the option to select which A/R you want to use to assess finance charges.
QuickBooks Desktop for Windows
Before you start assessing finance charges, you need to set up your Finance Charge preferences.
- Log in to the QuickBooks company file as Admin.
- Go to the Edit menu, then select Preferences.
- Select Finance Charge, then go to the Company Preferences tab.
- Fill in the Annual Interest Rate (%), Minimum Finance Charge, and Grace Period (days) fields.
- From the Finance Charge Account drop-down, select the account you use to track income from finance charges.
- (Optional) If you don't want QuickBooks to assess finance charges on overdue finance charges, clear the Assess overdue finance charges checkbox.Note: Laws vary about whether you can charge interest on overdue interest payments. Confirm with the appropriate jurisdiction that you are in compliance with that jurisdiction's lending laws.
- Select the appropriate radio button for due date or invoice/billed date to indicate when you want QuickBooks to calculate finance charges.
- (Optional) Select the Mark finance charge invoices as "To be printed" checkbox if you want to print all your finance charge invoices in a single operation. If you send statements, leave this checkbox cleared. QuickBooks will include the finance charges on the next statement to the customer.
- Select OK.
QuickBooks Desktop for Mac
Set up finance charges preferences for QuickBooks to assess finance charges with any customers whose payments are late. Here's how.