Do you want to bill your customers Finance Charges and/or fees for overdue bills? Use Finance Charge Memos in Dynamics NAV, here’s how:
Setup involves 3 steps:
1. Adding accounts to the Customer Posting Group for the ‘Interest Account’, ‘Additional Fee Account’, and ‘Add. Fee per Line Account’ as necessary.
Navigate to Departments> Financial Management > Setup > Administration and select Customer Posting Groups.
2. Create Finance Charge Terms
Select ‘New’ and enter a Code for your Finance Charge Term
Enter a Description
Enter a Line Description that you want to pull into the lines in the Finance Charge Memo lines. You may use ‘Variables’ which are the %1,%2, etc as described farther down in this blog.
Minimum Amount ($)- If you charge a minimum amount for a finance charge, enter that amount in this field.
Additional fee- If you charge an additional fee, enter the additional fee here.
Interest Rate- Enter the interest rate you charge
Interest Calculation- There are two choices:
1. Balance Due Method 2. Average Daily Balance Method
Balance Due Method calculates as Overdue Amount x (Interest Rate/100)This calculation is just for overdue amount.
Average Daily Balance method which calculates as Overdue Amount x (Days overdue/Interest Period) x (Interest Rate/100). This takes into account the number of days the payment is overdue.
Interest Period (Days)- Enter the number of days in the interest period (you must fill this field in if you use Average Daily Balance)
Due Date Calculation- Enter a calculation to indicate how due date on the Finance Charge Memo is determined
Grace Period- Enter the amount of time you will add the the Due Date before you start charging interest
Post Interest- Check this box to post interest to the G/L when finance charge memos are issued
Post Additional Fee- Check this box to post additional fees to the G/L when finance charge memos are issued. Select OK.
Text can be entered the print at the top of the lines by entering ‘Beginning Text’ or ‘Ending Text’ on the lines in the Finance Charge memo. You may enter as many lines as you need. You must select this option from the list view of the Finance Charge Terms page.
You are limited to 100 characters per line. *The width of each character may effect whether or not the whole text will print so be sure to test before issuing.
If you update the Beginning or Ending text and you have already created Finance Charge Memos but not issued them, select the lines in the Finance Charge Memo list view and click on ‘Update Finance Charge Text’ on the ribbon or go into the individual Financed Charge Credit Memo you want to update and click on ‘Update Finance Charge Memo and select ‘Update Finance Charge Text’.
Here is the definition of Variables you can you in your Line Description on the Finance Charge Terms/Beginning and Ending Text to have NAV pull a specific piece of information.
The ‘Finance Charge Text’ in the screenshot above will print ‘Please Pay the total of %7’, where %7 will be replaced with the total (Remaining Amount+Interest Amount+Additional Fee+VAT)
3. Attaching Finance Charge Terms to Customers
Open the Customer card and make a selection on the Payments tab for Fin. Charge Terms Code
There are two ways to create finance charge memos:
Typically used when you are issuing to a specific customer
Select ‘New’ and enter a Customer No..
Select ‘Suggest Fin. Charge Memo Lines’ from the ribbon
The lines will pull in.
Select ‘Finance Charge Memo’ Print from the ribbon or select ‘Email as Attachment’.
Click ‘Issue’ to post the Finance Charge Memo.
Typically used to create Finance Charge Memos for all Customers at once
Select ‘Create Finance Charge Memos’
Enter the Posting and Document Dates and click ‘OK’.
A Finance Charge Memo will be created for each customer with overdue invoices due for the finance charges.
Select the memos you would like to post and select ‘Issue’ from the ribbon.
Make a selection for Print.
Specify if you would like to ‘Replace Posting Date’ and enter a ‘Posting Date’ if you want to change the dates. Select OK.
This is what your Finance Charge Memo might look like:
To see Issued Finance Charges by navigating to Departments>Financial Management>Periodic Activities>Receivables>Issued Finance Charge Memos.
Navigate to the Customer Ledger Entries from the Customer card and you can see that a Finance Charge Memo has been added to the customer’s account.