To calculate finance charges the customer’s statement option must be set up as type ‘2’- PRINT STATEMENT WITH FINANCE CHARGE. This is set up in the Accounts Receivable Menu; Add, Update Delete Customers option. Otherwise, there will be either no statement printed, or the statement will not include any finance charge calculations.
Step 1 is to find out how long the invoice has been overdue:
The days overdue for each invoice is computed by counting the numbers of days between the invoice date and the statement date.
e.g. Invoice date is September 24; statement end date is December 31
September 25, 26, 27, 28, 29, 30 6 days
October 1-31 31 days
November 1-30 30 days
December 1-31 31 days
Total 98 days
Next, the net invoice date is subtracted from the 98 days
E.g. The customer terms are 2% 10 Net 30
Therefore 98 days – 30 days is 68 days.
The DAYS OVERDUE is 68 days for that invoice