Here are some answers to common questions about Finance Charges.  If you go to the Accounts Receivable module, typically you'd select some accounts and then click the "Apply Finance Charges" button to post the charges.

Facts about Finance Charges

  1. Spire only looks to see if an AR item is overdue (per the invoice's Due Date) to determine if finance charges should be applied.  It doesn't care how long it has been overdue.
  2. If the invoice is overdue, Spire calculates the finance charges based on the rate supplied in the Company Settings → Accounts Receivable → "Monthly Interest Rate" field.
  3. Once an invoice's Due Date is set, it is not changed by changing the Customer's Payment Terms nor the Payment Term's due threshold.  The Customer's Payment Terms are simply used for calculating the Due Date when the invoice is created.
  4. Note that the Customer's "Billing" tab should be setup with Payment Terms and "Apply Finance Charges" checked in order for finance charges to work in the first place.
  5. If existing finance charges have not been paid the next time you apply finance charges, the new charges will be calculated on the total overdue amount (the past due amount plus the existing unpaid finance charges).
  6. Finance charges are applied manually and not automatically.  For example, if you want to apply charges each month, then once a month you have to apply the finance charges.
  7. If your interest rate is 2%, then the charge will 2% of the total overdue amount at the time charges are applied.  For example, the system doesn't care if the overdue amount has been overdue for X months because the rate is never "2% per month" or something periodic like that.