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        <a class="WebWorks_Breadcrumb_Link" href="sales.7.1.htm#1088668">Sales </a> &gt; <a class="WebWorks_Breadcrumb_Link" href="sales.7.16.htm#1088668">Credit control</a> &gt; Finance charges paid by customers</div>
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      <blockquote>
        <div class="hm_ModuleHeading"><a name="1088668">Finance charges paid by customers</a></div>
        <div class="b_Body"><a name="1088669">Finance charges are amounts added to an outstanding balance as </a>a penalty for late payment. A finance charge is added to a customer’s statement. The amount paid by a customer to cover the charge is then recorded in the <span class="w_Widgets">Receive Payments</span> window.</div>
        <div class="hr_RunInHeading"><a name="1088672">How finance charges are calculated</a></div>
        <div class="b_Body"><a name="1088673">For each open invoice, </a>your MYOB software calculates its due date using the terms specified on the <span class="w_Widgets">Selling Details </span>tab of the <span class="w_Widgets">Card Information</span> window. The overdue balance is then increased by 1/30th of the monthly charge for late payment for every day it is overdue, where the monthly charge is calculated by multiplying the amount overdue by the <span class="w_Widgets">%</span><span class="w_Widgets">&nbsp;</span><span class="w_Widgets">Monthly Charge for Late Payment</span> value you specified on the customer’s card.</div>
        <div class="b_Body"><a name="1088674">If the customer makes a partial payment during the overdue </a>period, the finance charge is adjusted accordingly.</div>
        <div class="hr_RunInHeading"><a name="1088677">Setting up finance charges</a></div>
        <div class="b_Body"><a name="1095409">Before you can apply finance </a>charges, you need to select an account for tracking late-payment charges. Go to the <span class="w_Widgets">Setup</span> menu, choose <span class="w_Widgets">Linked Accounts</span> and then <span class="w_Widgets">Sales Accounts.</span> Select the <span class="w_Widgets">I assess charges for late </span><span class="w_Widgets">payment</span> option and select an income account to record the late payment charges.</div>
        <div class="b_Body"><a name="1088678">Set the percentage you will be charging for late payments in the </a><span class="w_Widgets">%</span><span class="w_Widgets">&nbsp;</span><span class="w_Widgets">Monthly Charge for Late Payment</span> field of the <span class="w_Widgets">Selling </span><span class="w_Widgets">Details</span> tab of each customer card. </div>
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          <span class="N_007eProcBullet"></span><a name="1125101">Adding finance charges to customer statements</a><script type="text/javascript" language="JavaScript1.2">WebWorks_WriteArrow(WebWorksRootPath, "wwdd1125101", false);</script></div>
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        <div class="b_Body"><a name="1129264">To show the finance charge owed by customers on their </a>statements, select the <span class="w_Widgets">Add Finance Charges to Amount Due</span> option in the <span class="w_Widgets">Advanced Filters</span> window. For more information about customer statements, see <span class="l_Link"><a href="endofperiod.21.8.htm#1087574">Send customer statements</a></span>.</div>
        <div class="b_Body"><a name="1129268">The finance charges payable by your customers only appear on </a>their statements, so you may want to keep copies of the statements sent to customers.</div>
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          <span class="N_007eProcBullet"></span><a name="1095404">Recording finance charges</a><script type="text/javascript" language="JavaScript1.2">WebWorks_WriteArrow(WebWorksRootPath, "wwdd1095404", false);</script></div>
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        <div class="b_Body"><a name="1088683">When your customer pays the late-payment charge, type the </a>amount in the <span class="w_Widgets">Finance Charge</span> field of the<span class="w_Widgets"> Receive Payments</span> window. For more information, see <span class="l_Link"><a href="sales.7.14.htm#1088369">Receiving payments</a></span>.</div>
        <div class="b_Body"><a name="1088687">Although the history of finance charges is not tracked, you can </a>perform an account inquiry (using <span class="w_Widgets">Find Transactions</span>) on the income account you have set up to record late charges. </div>
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          <span class="N_007eProcBullet"></span><a name="1088691">Deleting finance charges</a><script type="text/javascript" language="JavaScript1.2">WebWorks_WriteArrow(WebWorksRootPath, "wwdd1088691", false);</script></div>
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        <div class="b_Body"><a name="1088692">When you enter a finance charge in the </a><span class="w_Widgets">Receive Payments</span> window, two transactions are recorded—the full customer payment, including the finance charge, is recorded in the receipts journal and a transaction for the finance charge is recorded in the sales journal. </div>
        <div class="b_Body"><a name="1088693">Therefore, if you want to delete a finance charge payment, you </a>must delete both transactions. If only one entry is deleted, the <span class="w_Widgets">Receivables</span> <span class="w_Widgets">Reconciliation Summary </span>report may show an out‑of‑balance amount equal to the finance charge. When you delete one of the entries, you are reminded to delete the other entry for the finance charge. Note that a warning appears even though you may have already deleted the corresponding invoice or payment.</div>
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