ARCALFCH Accounts Receivable Finance Charges Processing

Revised Date: 08/04/2020

Finance Charges Processing

Application Overview


A finance charge is an amount the customer is charged when open items on his account have become too long overdue.  This application allows you to calculate finance charges and to charge them to your customers' accounts.  If you usually calculate finance charges manually, you do not have to use this application.  Instead you can enter your manually computed finance charges by way of the Sales & CR/DR Memo Proces­sing application.


Several of the entries you made during A/R Setup have some relevance to Finance Charges Processing.  For example, A/R Setup allowed you to specify how overdue the items on a customer's account must be before they are subject to finance charges.  You may want to refer to the explanation of these fields in the Application Overview and Run Instructions for A/R Setup.  However, most of these points will be covered here as well.


Finance charges are calculated by this program in the following way:


1.   For the purpose of this explanation, let us assume that you have specified that the customer can be charged a finance charge on items that are more than 60 days old.  The program goes through all of the open items on a customer's account, looking for those invoices which are older than 60 days.  The total of these invoices is accumulated.  While this is occurring, the program adds up to the total of all credits to the customer's account, whether the credit is from credit memos or from payments.


2.   If the total of the credits is larger than the total of the overdue amount, then no finance charge is calculated. Sometimes a user may get confused about why the system does not calculate finance charges for invoices that are past due. This can happen if there are non-past due invoices that are already paid. We do not include the amount of these invoices in the overdue amount while the associated payment is part of the total credit. The reason for this is because your customers may argue that if you apply those payments to older past due invoices, then there may not be any past due.  So the system takes a conservative approach with calculating finance charges to avoid arguments with customers. If you don't like this approach, you can consider purging the fully paid open items to history on a daily basis -- probably though Defer Processing -- so only outstanding invoices, open credit,  and partial payments are in the open item file.


3.   On the other hand, if the total overdue amount is greater than the total of credits on the customer's account, then a finance charge is calculated on the difference between these two amounts.  For example, if the total of overdue amounts was $4,500 and the total of credits and payments was only $1,500, a finance charge is going to be calculated on the overdue $3,000.


4.   In A/R Setup, you specified up to two levels of finance charge percentages.  Let us take an example here:  finance charges are calculated at 1.5% on amounts up to $1,000, and at 1% on amounts over $1,000.  Using these sample figures, the finance charge on the overdue $3,000 would be calculated like this:


                                                $1,000 x 1.5% = 15


                                                (3,000 ‑ 1,000) x 1% = 20


                                                Total finance charge = 15 + 20 = $35


Most of the figures that are used during this calculation are up to you to specify.  You may want to review the entries made during A/R Setup to be sure that they actually match the way you want to calculate your finance charges.


Not all customers will necessarily have a finance charge automatically calculated for them.  During Customer File Maintenance, you specified whether each customer was subject to this automatic calculation.  You can omit certain customers from this calculation, and compute their finance charge amounts by hand.  Some of your customers may even be exempt altogether.

Run Instructions


Select Finance Charges Processing from the pull down A/R Processing window.  The following screen will then be displayed:




Finance Charges Processing Screen




The following options are available:

  • Allows you to change calculated finance charges
  • Delete calculated finance charges made against a customer before they are posted
  • Print the finance charges made against a customer before they are posted to the customer's account
  • Calculate finance charges


To return to the menu bar, press the ESC or F10 key.  To leave this application, press X for EXIT when positioned at the menu bar.

Entry Field Descriptions





Type and Description

Customer No

6 alphanumeric characters.

Enter the customer number whose finance charge you want to change or delete.  The past due amount that was calculated for this cus­tomer will then be displayed.

Press the F7 key for customer search by number or press the F8 key for customer search by name.

Past Due Amount

Display Only.

Finance Charges               

9 numeric digits with 2 decimal places (9,999,999.99).

Enter the finance charge amount you want to charge the customer, if it is different from the amount calculated by the program.





Type and Description

Document Cut‑off Date

A date in the standard date format.

This is the date that will be used to determine how old a document is.

Statement Frequencies To Calculate

1 alphanumeric character.

Enter the statement frequency code for the customers whom you wish to calculate finance charges on.

If you press RETURN the field will default to All statement frequen­cies.

Statement Frequencies To Calculate  (continued)

This field can have any of the following values:


W             =              Weekly

S              =              Semi-Monthly

M             =              Monthly

Q             =              Quarterly

D              =              Discretionary

N              =              No Statement




Finance Charge Processing





Finance Charges Processing (Calculate)



Post Finance Charges

Application Overview


The Post Finance Charges application transfers all transactions that were previously created in Finance Charges Processing into the A/R Open Item File. In addition it sends this information to the Customer File Maintenance, Salesman File Maintenance, and A/R Distribution To G/L file applications. Consequently the result of posting serves to automatically adjust the balance that a given customer owes your business. It also affects the cost of sales, and other related variables recorded in the customer and salesman files.     


When you perform a posting, the system prints a journal of all transactions that were posted.


Run Instructions


Select Post Finance Charges from the pull down A/R Processing window.  The following screen will then be displayed:





Post Finance Charges Entry Screen




 The following option is available:

  • Post finance charges


To return to the menu bar, press the ESC or F10 key.  To leave this application, press X for EXIT when positioned at the menu bar.


Entry Field Descriptions



Type and Description

Do You Want To Post At This Time?

Y or N.

Enter Y to post or N to decline.




Post Finance Charges




















Accounts Receivable

  1. ARMENU Accounts Receivable Package Overview
  2. Feature - Elliott AR ACH Processing
  3. How to Automatically Credit Check Order at Time of Pick Ticket
  4. Fine-Tuning Customer File Maintenance Security
  5. I Receive "No Open Item on File" Message When I Try to Reapply Open Credit or Payment in AR
  6. Can I Reapply a Payment to a Different Customer in AR?
  7. AR Aging Report - What's the Difference Between Py and Px Payment Type ?
  8. Avg Days Pay YTD in Customer File Calculation Issue
  9. Opn Ord Pick/Inv Amt Calculation Issue
  10. Auto Assigned Sales Tax Code by State and County
  11. How to Handle Sales Tax for Single Item with Caps Amount
  12. How to Subscribe a Customer Event by Salesman?
  13. Arizona Cities Not in Elliott for Sales Tax Code Auto Assign
  14. AR0111 Accounts Receivable Carrier File Maintenance
  15. AR0112 Accounts Receivable Carrier Mode Maintenance
  16. AR0113 Accounts Receivable Freight Rate File Maintenance
  17. AR0114 Accounts Receivable Freight Zone File Maintenance
  18. AR0120 Accounts Receivable State Table File Maintenance
  19. ARACTINQ Accounts Receivable Customer Account Inquiry
  20. ARACTMNT Accounts Receivable Account File Maintenance
  21. ARACTSUM Accounts Receivable Customer Account Summary Inquiry
  22. ARADJAUD Accounts Receivable Adjustment Auditing Inquiry
  23. ARADJSCN Accounts Receivable Adjustment Auditing Report
  24. ARAGEBAL Accounts Receivable Age Customer Accounts
  25. ARAGEMNU Accounts Receivable Aging Reports
  26. ARAPLYCR Accounts Receivable Re-Apply CR/DR Memos
  27. ARCALFCH Accounts Receivable Finance Charges Processing
  28. ARCNTMNT Accounts Receivable County Tax Code File Maintenance
  29. ARCRCMNT Accounts Receivable Credit Card Transacting Handling
  30. ARCRDSCN Accounts Receivable Credit Card Log Report
  31. ARCSHENT Accounts Receivable Cash Receipts Processing
  32. ARCSHSCN Accounts Receivable Cash Projection Report
  33. ARCTLMNT Accounts Receivable A/R Setup
  34. ARDBEXPS Accounts Receivable Export D&B Customer File
  35. ARDISSCN Accounts Receivable A/R Distribution to G/L Report
  36. ARECIMNT Accounts Receivable Customers and Contacts Import Utility
  37. ARHSTMNU Accounts Receivable A/R History Report
  38. ARINVSCN Accounts Receivable Print Service Invoices
  39. ARJBASCN Accounts Receivable Job Analysis Report
  40. ARJOBMNT Accounts Receivable Job Code File Maintenance
  41. I Can Only Enter A/R Cash Receipt for Cash or Check
  42. ARCUSMNT Accounts Receivable Customer File Maintenance
  43. ARLTRMNT Accounts Receivable Customer Mail Merge
  44. Feature - Prompt ACH Deposit Effective Date to Avoid Non-Business Day
  45. AROLOAD Accounts Receivable A/R Open Item File Maintenance
  46. ARPRDEND Accounts Receivable Clear A/R Accumulators
  47. ARPRGSCN Accounts Receivable Purge Closed Open Items
  48. ARRECENT Accounts Receivable Recurring Sales Processing
  49. ARSAMENU Accounts Receivable Sales Analysis Report
  50. ARSETBAL Accounts Receivable Set Customer Account Balances
  51. ARSHPMNT Accounts Receivable Ship Via Code File Maintenance
  52. ARSLMMNT Accounts Receivable Salesman File Maintenance
  53. ARSLSENT Accounts Receivable Sales and CR/DR Memo Processing
  54. ARSRCMNT Accounts Receivable Payment Source File
  55. ARSRVENT Accounts Receivable Service Invoice Processing
  56. ARSRVMNT Accounts Receivable Service File Maintenance
  57. ARSTMSCN Accounts Receivable Print Statements
  58. ARTAXMNT Accounts Receivable Tax Code File Maintenance
  59. ARTRMMNT Accounts Receivable Terms Code File Maintenance
  60. ARTYPMNT Accounts Receivable Customer Type File Maintenance
  61. ARSTLSCN Accounts Receivable Sales Tax Liability Report
  62. Incorrect Opn Ord Pick/Inv Amount in Customer File
  63. Feature - Customer Account Inquiry Reference Search
  64. Feature - Tax Freight Setup User Messages in COP Setup and Tax Code Maintenance
  65. ARFRMMNT Accounts Receivable Invoice Form Setup
  66. Feature - Customer Highest Balance YTD, Last Year, and Year Before Last Year
  67. Feature - Ship Via Group Support
  68. Feature - Scheduling ACH Payments
  69. How to Print A/R Aging Report by Salesman
  70. Feature - A/R Expanded Aging Report - Add "Show Open Items Only" Option
  71. Refund customer open credit / overpaid
  72. Feature - Add Acct Name to ACH Account Detail Screen
  73. Feature - ACH Add and Change Event
  74. Feature - Import A/R Cash Receipt Detail -- Add Ability to Process Multiple Customers for One Check
  75. Feature - A/R Commissions Due Reports - Additional Fields and CSV Support
  76. Feature - Age Customer Accounts When Cash Receipts Are Posted
  77. Feature - Validate Collector Against Salesman File
  78. NSCTLMN2 Accounts Receivable Global Setup 1
  79. NSCTLMN2 Accounts Receivable Global Setup 2
  80. NSCTLMN2 Accounts Receivable Global Setup 3
  81. NSCTLMN2 Accounts Payable Global Setup 1
  82. NSCTLMN2 Accounts Payable Global Setup 2
  83. NSCTLMN2 Accounts Payable Global Setup 3
  84. NSCTLMN2 Accounts Payable Global Setup 4
  85. NSCTLMN2 Accounts Payable Global Setup 5
  86. NSCTLMN2 Accounts Payable Global Setup 6
  87. NSCTLMN2 Accounting Global Setup: Index
  88. Accounts Receivable Cash Receipts Reports That Show Check Deposits for a Period of Time
  89. What Does the Asterisk Mean in A/R Account Inquiry?
  90. Refund Customer for Open Credit or Over Payment
  91. Feature - Defer Cash Receipts with Wildcard Batch Entry
  92. Feature - Exclude Debit Memos from Updating Customer Sales Ptd/Ytd
  93. Change - Sync Order Addresses in Customer Change Program
  94. Feature - Append Re-Apply Cr/Dr Memos Info To Log File
  95. Feature - Zone Breakdown Method by Freight Pay Code and State
  96. Feature - Enter Customer in Maintenance and Inquiry Event
  97. Feature - Added Phantom Locking to Customer File Maintenance
  98. How Do I Start to Collect Sales Tax for Other States?
  99. How Does Elliott Determine Sales Tax Codes?
  100. Why Are Customer Last Aging Date and Amounts Not Updated?
  101. Feature - Added a Generic Utility to Mass Update Customer by CSV
  102. Feature - Ship-to Special Function Support in Customer Maintenance/Inquiry
  103. Feature - Aging Reports to Default to Previous "Detail or Summary" Value
  104. Feature - Allow to Reapply a Check to an Invoice that was Applied to Before
  105. Feature - Add Support Customer Finance Charge Flag to the Mass Change Customer CSV Import
  106. Feature - Add Support for Customer Tax Codes to the Mass Change Customer CSV Import
  107. Feature - Payment History Inquiry
  108. Feature - Custom Receipt Comments in On-Line Credit Card Processing

Feedback and Knowledge Base