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Late Fee Calculation - Annual Percentage Rate (APR)

How Late Fees are assessed:

When the Late Fees Assessment is run, all of the information pertaining to customers, and their overdue balances is displayed. The entries listed in black fit within the 30-90 day window for assessing fees. Any names shown in red are now beyond 90 days and the software has stopped automatically including these in the fee assessment process. There is the option of clicking the Apply Fee box if you want to assess this party with a further late fee. It is also possible to edit any individual fee listed. Once you’re satisfied with all of the values, click on Assess fees to run the process. This will conclude with the option to print a Late Fee Assessment report at this time.

When any of these customers’ balance is looked up with F5 Batch Payment window, the fees will appear as separate items included in their balance. At your discretion, the Delete Fee button will remove it from their account balance. On the other end of the spectrum, there may be some accounts such as family or employees that should never be assessed late fees. When Late Fees are enabled, all customers are defaulted to be assessed in the monthly process. It is possible to exclude certain customers by going to Utilities, Customer Screen and selecting the customer by name. Then click on Update Customer; put a check in the Exempt from Late Fees box and click OK. This customer will now be excluded any potential Late Fee assessments.

Recommendation: Update your disclaimers to warn your customers of the possibility of late fees, should they owe a balance 30 days past the invoice post-date.

Formula:

Balance x ( (APR/100) x (30 Days / 365) ) = Late Fee

Scenario 1:

Math example of how late fees are calculated @ an 18% APR.  An invoice charged of 392.11 dollars is now over 30 days and has been assessed. 

$392.11 charged amount
18% APR
30 days of 365 is applied a fee
$392.11 X ( (18/100) x (30/365) ) = $5.80

Scenario 2:

Math example of how late fees are calculated @ a 7% APR.  An invoice charged of 1,000 dollars is now over 30 days and has been assessed.

$1,000 charged amount
7% APR
30 days of 365 is applied a fee
$1000 x ( (7/100) x (30/365) ) = $5.75

How to setup Late Fees:


Created by Rico on 9/2/2016

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