Set up Finance Charges and Charge Customers for Overdue Balances in Sage 100


Finance Charge Calculation Procedures

  1. Accounts Receivable, Period End, Finance Charge Calculation is used to calculate finance charges prior to statement printing. Select a specific Statement Cycle or a range of customers. The default values for both Min Balance to Apply and Min Finance Charge to Apply are derived from settings in Accounts Receivable Options. Min Balance to Apply excludes customers from the calculation if their total past due amount is below that value. A Min Finance Charge to Apply value specifies the minimum amount to be charged of those customers who will be charged. The two default values may be over-ridden.
  2.  Finance Charge Entry is used if a fixed finance charge is to be created separately for a single customer.
  3.  The Finance Charge Journal must be updated for changes to take effect. Finance charges, once created, appear as newly created invoices of transaction type F/C. These appear on the Aged Invoice Report, on the Trial Balance, or on the Invoices tab in Customer Maintenance, etc.


  • The system is versatile enough for users to generate finance charges periodically – up to every day. Each time finance charges are generated, new F/C type transactions are created for customers. Both old and new finance charges coexist until paid. Example: If a finance charge is generated for $30.00 after updating the Finance Charge Journal, it is possible to generate an additional finance charge of $30.00 (for a total of $60.00) if the Aging Date is incremented by one day when running the Finance Charge Calculation again. The additional finance charge may be more if finance charges are calculated on existing finance charges as well.
  • F/C transaction types are not stored in invoice history, therefore cannot be drilled down when an F/C line is highlighted and selected from the Invoices tab of the Customer Maintenance screen.

Setup and Troubleshooting

  1. Open, Accounts Receivable, Setup, AR Division Maintenance
    • Select division
    • Enter GL account for Finance Charge
    • Click Accept
  2. From the Setup menu, on the Accounts Receivable Options, Additional tab, there is an Age Invoices By option:
    • If aging invoices by Invoice Date, make sure the Number of Days Past Due for F/C Calculation is set correctly on the Additional tab. If the value is 045, finance charges will be computed 45 days past the due date.
    • If aging invoices by Due Date, make sure the Aging Category for F/C Calculation is set to the correct category on the Additional tab. If Current, invoices are targeted for finance charges as soon as they become overdue. If it is 1 and the first of the Aging Categories back on the Main tab is 30 Days, finance charges will be computed for invoices 30 days past their due dates.
  3. On the Accounts Receivable Options, Additional tab, verify Finance Charges are set to calculate. The Finance Charge Computation Method should be Fixed or Percent.
  4. If the Exclude Existing Finance Charges from Calculation checkbox is unchecked, new finance charge calculations will be based on both unpaid invoice and unpaid finance charge amounts.
  5. The Standard Monthly Finance Charge Rate or Amt is used to determine the finance charge. This rate or amount is used whenever Finance Charge Calculation is run, not necessarily monthly.
  6. The Minimum Finance Charge to Apply is useful, especially when using a percentage rate to calculate finance charges. A low percentage on a low past due amount will generate a small finance charge. (See Finance Charge Calculation Procedures above for more details.) This value in Accounts Receivable Options is available if Percent is chosen as the computation method.
  7. The Minimum Balance to Apply Finance Charge sets a minimum total past due amount upon which finance charges will be computed for a customer. If finance charges are to be calculated, verify total past due amount for a customer is greater than the value for the Minimum Balance to Apply Finance Charge.
  8. Verify in Customer Maintenance, on the Additional tab, that a Finance Charge Rate has been set correctly for invoices. The rate can be a percent value or an amount, depending on whether Finance Charge Computation Method is Percent or Fixed, as set in Accounts Receivable Options.

Note: The Finance Charge Rate value on the Additional tab in Customer Maintenance takes precedence over the default in Accounts Receivable Options (which is used only when adding new customers), and over any modified value set in Finance Charge Calculation.

Note: You can also use Global Customer Field Change in Accounts Receivable to change the Finance Charge Rate for multiple customers at once.

Troubleshooting Example-Aged Invoice Report:
Issue: Finance Charges do not calculate for certain invoices in the Accounts Receivables Aged Invoice Report even though the invoices may appear in the aging columns and Finance Charge Calculation (or Entry) has already been entered and updated.
Possible cause: On the Setup menu, Accounts Receivable Options screen, Additional tab: If the Age Invoices By option is set to Invoice Date, this means the Aged Invoice Report will be run by the invoice date. If so, check the invoice due date. (Preview the Accounts Receivable Trial Balance by the customer, or use the Customer Maintenance, Invoices tab.) If not due, or if past due but not past the Aging Date or Aging Category, there will be no finance charge. The Days Delinquent (Days Delq.) column will show 00 days.