Reversal of Finance Charges - Automatically

The Finance Charge program (Task 4 in A/R) allows the system to automatically create negative Finance Charge invoices and apply them to the original Finance Charge invoices.   This program can be run by a single, range or all customers, along with a cutoff date you select.

Go to: 

•  Finance Charge Entry and Editing (Task 4)
  • ​Calculate FC Reversals (Sub-task 9)
    • ​The system will prompt for: Customer number (single, range or All) followed by a screen with the following prompts:
      • Please enter transaction date for reversals: ______
        • The date of the actual reversal (i.e. December 31, 20xx). A current date should be used.
      • Finance charge/activity cutoff date:__________
        •  The date the system will use to look for old-dated finance charges (i.e. finance charges before September 1, 20xx).  Note: There are a few things to be aware of:
          • If there is ANY activity prior to the date (using the example of September 1^st and there is an old invoice dated in August or a credit memo, etc.), the system will by-pass the customer and no further checking will be done for that account.
          • Checking is done in A/R Open Item transaction date order, oldest to newest for each customer account
          • Only finance charge transactions dated on/before the date entered in the prompt  'Finance charge/activity cutoff date:____' will be considered
          • If there is ANY other activity on the customer account dated the same-as or prior to an original finance charge then the finance charge will be bypassed
          • If an original Finance Charge invoice has any activity on it such as a partial payment or a CM applied to it….any activity, the finance charge will be bypassed and no further checking will be done for that account (all newer finance charge transactions are automatically bypassed)

      • Reversal trx dollar maximum (each): _________       ($0-NO limit)

        • Any individual FC greater than the $ maximum will be bypassed and NOT reversed.  For example, if Finance Charges were previously calculated for $25.00 and $18.00 but you want to keep the $25.00 FC on the account, if $20.00 is entered in the 3rd prompt, the $25.00 FC would remain on the account, whereas the $18.00 FC would be reversed.

        • Entering zero ($), which is the default, means there is no limit at all….all FC invoices will be considered.

      • A ‘reversal’ finance charge will be created for each eligible finance charge invoice.  For example, if a customer has 3 eligible FC invoices on their account ($5.00, $7.50 and $8.00), then 3 separate reversal/negative Finance Charges will be created….one for $5.00, another for $7.50 and a third for $8.00)

      • After the amount field is filled in the cursor will be at the bottom of the screen at the “Any change?” question. Press the enter key.

        • ​If there is no finance charge reversals to create for the selections this message will be on the screen: “No finance charge transactions to reverse.  CR TO CONTINUE”.

          • ​Press enter key.  There could be other transactions on the customer’s account within the date range causing the system to not create the reversals.  The reversals may need to be created manually, see the document Finance Charges - Reverse Old FC's Manually.

        • ​If the system created finance charge reversals, the cursor will be at the finance charge Sub-task screen.  In the middle of the screen “Current TRX count: __” will have the # of finance charge reversals created.   Use the below sub-tasks to verify, change & delete the reversals before using the sub-task 5 to post the reversals to A/R.

• ​Print Finance Charge Edit List (Sub-task 4)      Print the edit list and review for any changes and/or deletions that might needed.

• Change Existing Finance Charge (Sub-task 2)    Make any changes that are needed

• Delete Existing Finance Charge (Sub-task 3)     If a customer’s reversal for a FC appears on the edit list that you want to keep on their account, then delete the transaction.

• Post Finance Charge to AR Files (Sub-task 5)  When satisfied with the edit list, post the transactions.  The system will automatically ‘apply’ the negative FC to the original FC.   As stated above if there were 3 eligible FC invoices ($5.00, $7.50 & $8.00), the system will create 3 negative FC invoices (-$5.00, -$7.50 & -$8.00) and apply them to the correct FC invoice.   At month-end when the “Clear paid inv.'s from A/R open” program is run, the FC invoices will be removed from the customer’s records.

NOTE: This posting journal should be saved for auditing purposes

This sub-task posts finance charges to the following master files:

• Customer Master (only the aging)
• Open Items
• Sales History
• Distribution History
• Batch Control

Add New Finance Charge (Sub-task 1).  You can manually enter a negative Finance Charge (be sure to put a – sign in from of the dollar amount).   Once it is posted, using sub-task 5, you would then need to use Task 3 – Change Apply-to #’s, and apply the newly created negative FC to the original Finance Charge invoices.