Finance Charge

Finance Charge (FNCHG) is used to define the characteristics of fees used in the finance charge process. Accounts Receivable Department and Unit are included to allow Finance Charges to be defined departmentally by specific departments and units. If Finance Charges are to be defined centrally, then a value of ALL should be used in both the Department and the Unit field.

You can set the following characteristics on a Finance Charge:

• Finance fee charge type - flat fee or interest

• Flat fee amount - one-time or recurring

• Interest percentage - simple or compound (simple interest is accrued on the outstanding principal only (Line Type of principal) and  compound interest is accrued on the outstanding principal and account distributions with a posting type (Interest, Late Fee, Administrative Fee, NSF Fee, Other Fee, or Tax) that has been setup for compound interest on the System Options page.)

• Administrative fee

• Frequency for automatically applying flat fee or interest charges

• Rate Type - These fields provide an option to apply interest charges in one of two manners by the Finance Charge process:

• Variable Percentage - The calculation uses a number of days in the calculation. This is the default and only works with just Finance Charges.

• Fixed Percentage - The calculation is Principal * Interest. This choice only works when using Finance Charge Cycles.

Rate Type is not initially visible and must be made so with Configure Page before testing Finance Charge Cycles.

• Posting type of finance charge - for example, interest, late fee, administrative fee

• Chart of accounts information - specifies chart of accounts fields to which a finance charge is distributed

Once the finance charge settings are defined, you can specify them to be used system wide on System Wide Options and Control or for particular Accounts Receivable Departments and Units on the Billing Profile table.