How statement interest charges work

Statement interest runs per customer rather than per invoice. On each run it looks at everything the customer owes, works out the interest, and creates one interest invoice per currency with a line for each overdue invoice.

Use this instead of invoice late fees when you want one charge a month rather than a fee on every invoice. Do not run both in the same group. It pairs naturally with a monthly statement that shows the customer the balance the interest was worked out on.

Setting one up

Open a group, go to its Policies tab and add a statement interest policy.

• Schedule: monthly on a day of the month, monthly on weekdays only (rolls forward to the next business day), or weekly.
• Method: an annual interest rate worked out per day since each invoice fell due (or since the last charge), or a flat percentage of the amount due.
• Which invoices: overdue only, or everything outstanding. Minimum and maximum overdue age narrow it further.
• Compounding: Include previous interest charges is on by default, so earlier interest invoices count towards the balance.
• Credits: Adjust for Credit reduces the balance by unallocated credit notes and overpayments.
• Minimum and fixed charges: optional. Nothing is issued when the total is zero.
• Account: the income account for the interest invoice.
• Email: optionally tell the customer when interest is charged.

Things to know

• Frozen invoices and invoices with a future expected payment date are left out, and a frozen contact gets no charge at all.
• Interest invoices are created in Xero or QuickBooks and show on statements like any other invoice.
• Remove Interest Charge(s) on the completed action voids the interest invoice.
• The Test & Preview tab on the policy shows what would be charged for one customer today.
• To charge interest once, outside the schedule, open the contact and click Charge interest in the header.