![]() It is imperative that you write-off bad debt at some point or the finance charges will continue to compound over the course of time. Furthermore, this method will re-calculate finance charges over and over again on the same outstanding invoices each time you post finance charges. ![]() This method is sensitive to when you actually post the finance charges because it does not take into account any invoices that were paid late. ![]() It does not compound finance charges on the same outstanding invoices that it used on previous finance charge postings.Īll Unpaid Invoice method computes the customer finance charge by summing all outstanding invoice balances only that were not satisfied before the invoice due date plus the pre-defined grace period. One other aspect to this finance charge method is that it will consider an invoice for finance charge calculation only on time. This means that invoices with no balance at the time of generating finance charges, could still be calculated in the finance charge equation if the customer failed to make payment on time. New Past Due Invoice method computes the customer finance charge by summing all invoice balances that were not satisfied before the invoice due date plus the pre-defined grace period. The difference between the two methods is in how they qualify the customer invoices that will receive the finance charges. There are two basic principles in how you can apply finance charges using ManageMore( In some respect, it is similar to the varying methods of how to compute interest on a loan).
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