Charge interest

Overview

You can charge interest to customers who have an outstanding balance. Charging interest automatically creates an adjustment invoice. Before you begin charging interest, you’ll need to create a task code item in your pricebook and add an invoice type for interest charges.

Things to know

• This article goes through the legacy workflow of charging interest. For more on charging interest using the Invoices module, see Charge interest using the Invoices module.

• When an adjustment is created, the date on the original invoice does not change. The date on the adjustment invoice is the date the adjustment is created.

• The outstanding balance is not linked to the payment terms set on the invoice.

Set up a task code item in the Pricebook

To charge interest, you first set up a task code item in the Pricebook.

1. Go to the navigation bar and click Pricebook > Services.

2. Click Add Service.

3. In the Details tab enter service details.
   

   Note: You can leave the Price field as $0.00.

4. When you are done, click Save.

Add an invoice type for interest charges

After you have a task code set up, you can build an invoice type for interest charges.

To build an invoice type:

1. Go to the navigation bar and click Settings .

2. In the side panel, click Invoicing > Payment and Invoice Types.

3. Under Invoice Type, click Add.
   
   The Invoice Type pop-up opens.

4. Enter the Name of the invoice type.

5. Click SAVE.

Charge interest

To charge interest:

1. Go to the navigation bar and click Accounting.

2. Click the Select a batch dropdown and select Create a new batch.
   
   Create a new batch opens.

3. Enter a Batch Name and select a QuickBooks Company File.

4. When you’re done, click Save. A batch number is automatically assigned to the batch. You can find the batch number and the batch name on the Select a Batch field.
   

   Note: You can also click Select a Batch and select a batch from the dropdown.

5. Once an open batch is selected, click Charge Interest.
   
   The Charge Interest screen opens.

6. Enter interest details:

   1. Interest Rate: Percentage of interest that will be billed, as a decimal. For example, 10% would be 0.10

   2. Task Code: Service created that acts as the line item for interest.

   3. Inv. Type: Select the invoice type created that pertains to interest.

   4. Invoice Date: Date that appeara on the adjustment invoices.
      

7. By default all invoices with an outstanding balance in the batch are selected. Unless the invoice is less than a month old or belongs to a customer who is exempt from being charged interest.
   
   Any invoice can be excluded from this batch by unchecking the box next to the invoice.

8. When you’re done, click Create Invoice Adjustments. New invoices with interest charges are generated.

Note: The original invoice numbers don’t change, nor will any other information on the invoice.

You can find the invoices where you charged interest in the Accounting section under Batched.

Exempt customers from interest charge

1. Go to the customer record.

2. Click Edit .

3. Select Do not charge interest fee.
   

4. Click Save.

Want to learn more?

• See Manage the Accounting section