Service Charges

Owned by Loan Thai
Last updated: Aug 30, 2019
4 min read

Service charges are applied to overdue invoices, debit memos, etc.  Service charges are applied per customer per accounting period.  It is possible to create service charges to multiple account periods by running the process for each accounting period.  Existing service charges are excluded from future service charges.



 

 

Overview

Service charges are applied to overdue invoices, debit memos, etc.  Service charges are applied per customer per accounting period.  It is possible to create service charges to multiple account periods by running the process for each accounting period.  Existing service charges are excluded from future service charges.

Prerequisites



  1. The System Settings for service charges needed to be setup.
    Go to Master > Administration > System Settings > Receivables tab > Set the following fields.

    . Default Assess Days - The number of grace days after the due date.
    . Default Interest Rate - The interest rate to apply to the balance.
    . Misc. Charge Code - This miscellaneous charge code to use when creating the service charge, a debit memo.








  2. The user requires security permissions for "Service Charges" to run service charges.
    Go to Master > Security > User Profile > Select User > Module Permission > Receivables tab > Utilities > Check the Service Charges checkbox.






  3. Enable each customer to participate in Service Charges functionality.
     . Apply Service Charges - Enable service charges for the customer.
     . Interest Rate - The interest rate to apply to the balance.
                               If this value is not set, the system will default to the value set in System Settings.
     . Assess Days - The number of grace days after the due date, overriding the system settings configuration.
                              If this value is not set, the system will default to the value set in System Settings.







Generate Service Charges

Invoices and debit memos are created as part of the ERP processes.  Service charges are applied to the over due (due date plus grace period) invoices and debit memos based on a configured interested rate.

The service charges form is accessible from the menu Receivables >Utilities >Service Charges.







Service Charges Main form's actions and layout:

  • Execute - Apply the service charges to the customers as shown.

  • Close - Close the form

  • Retrieve - Retrieve the service charges available to apply

  • Reset Filters Button - Reset the filters

  • Update Layout - Apply the current UI layout

  • Reset Layout - Reset the UI layout to the default






Filters -

  • Division - The division to use for service charges

  • As Of Date - The date to use, affecting the cutoff dates for invoices, debit memo, etc. Service charges created will also be based on this date



Service Charges Headers - 

  • Include - Check the checkbox to include customer in Service Charges in the process.

  • Processed - Indicate if the customer has been processed or not.

  • Division Code - Division

  • Customer Name - Customer Tittle

  • Customer Short Name - Customer Short Name

  • Debit - The total debit amount

  • Credit - The total credit amount

  • Balance - The difference between debit and credit. Service charges are applied to this balance amount.Tot

  • Charge - The charge amount based on the balance and the interest rate.

  • Rate - The interest rate used

  • Misc. Charge Code - The miscellaneous charge code used when creating the service charges.

    From the example above:
    Service Charge = (Total Invoices - Total Debits) * 1.5% = (4856.43 - 1025.00) * .015 = 57.47



Service Charges Transaction Details - 

  • Invoice/Payment Number - Invoice number or Payment number

  • Type - Type of transaction

  • Debit - The debit amount

  • Credit - The credit amount

  • Due Date - The due date for the debit

  • Assess Days - The due date plus the number of grace days





Proofing -

The end results of running the service charges are debit memos created for the accounting period. 

To proof the work, one can run the Customer Statement report and/or the Invoice Proof report.

User will need to run "Invoice Update" and "Invoice Registration" for the Service Charge debit memo before it will show up on the Customer Statement report.



Notes and Limitations

  • No support for customers that have super and child relationship.

  • No way to excluded disputed invoices.

  • The un-applied and on-account has a cutoff based on the as of date.

  • The cutoff is based on the as-of date (not period end, etc).

  • Using the as of date on a non-open accounting period will return zero result.

  • No records are found if the targeted period is not open or doesn't exist.

  • Service charges are applied per customer per accounting period.

  • Will only pickup invoices and debit/credit memos that are registered.

  • The debit memos are not automatically  "Invoice Update" and "Invoice Registration".

  • All fields are read-only fields except for the Include field.