It’s not uncommon for business owners to assess interest changes on customers for outstanding invoices or late payments. Assuming you accept payment after the delivery of your business’s products or services, for instance, you probably have a specific deadline by which the customer is required to pay. If he or she doesn’t pay by this deadline, you can typically assess interest, assuming it’s allowed under your terms and conditions. When assessing interest, however, you should add it to the customer’s invoice in Quicbooks. So, how exactly do you add interest to an invoice using Quickbooks?
Quickbooks allows business owners to add charges to their invoices. You can add shipping charges and other charges, for instance, by choosing Lists > Items > New > Type > Other Charge. From here, you’ll have the option to set up charges for your invoices. You’ll need to complete all of the fields, including name, number, charge amount, account for the charge, etc. When you are finished, the charge will be added to the invoice.
Another option, however, is to add a finance charge to your invoice. This is usually the preferred method among business owners using Quickbooks. However, prior to adding a finance charge, you must first set up the finance change option in your account. This is done by logging in to your account and choosing Edit > Preferences > Finance Charges. Next, complete the required fields from within the “Company Preferences” tab. When you are finished, click “Customers” to access the Customers menu, followed by “Assess Finance Charges.” Next, choose the customers or jobs to which you want to assess the charge, after which you can click “Assess Finance Charges” to complete the change. Sorry if you were expecting more, but that’s all it takes to add finance charges to invoices using Quickbooks.
Keep in mind, however, that this doesn’t automatically calculate the interest charge. Rather, it allows you to enter the charge manually into the invoice. If you want to charge a customer 2%, for instance, you’ll need to calculate the total dollar amount instead of simply using 2%. Granted, this shouldn’t be a problem for most business owners, as interest charges are rarely assessed. Nonetheless, it’s still something that you need to be aware of when creating invoices.
Hopefully, this gives you a better idea of how to add interest to an invoice using Quickbooks.
Did this tutorial work for you? Let us know in the comments section below!