Generating Service Charges

Service Charges are finance charges applied to overdue invoices of Sales Orders. In DEACOM, only Sales Orders assigned term codes with finance percentages specified will generate Service Charges.

Configuration

Before generating service charges, the following are required:

  • Terms - One or more Payment Terms records must exist with a Finance percent specified. When entering a new record in Accounting > Maintenance > Terms, enter the percentage that will be charged for each overdue invoice in the "Finance %" field.
    • Note: This field represents the monthly rate, not the annual rate.
  • Bill-to Company "Service Charge" flag - The "Service Charge" flag on the General tab of a Bill-to Company must be checked in order to generate Service Charges, even if their invoices have terms codes which should generate Service Charges.
  • In order to print/email service charge invoices directly from the service charge screen, users must have access to "Printouts -- invoices". If not, the user will receive an "Access denied" system prompt.

Process

Configuring system options

What system defaults are required? In Accounting > Options > Accounts Receivable tab, enter values for the following:

  • Service Terms - Select a value in the "Service Terms" field, ensuring the selection has a Finance % specified. These will be the Terms used when generating Service Charge invoices and will override a company's default terms.
  • Minimum Dollars Past Due - Used to specify the minimum overdue amount that an account must be to generate Service Charges. This allows companies the flexibility to further limit the administering of Service Charges to select criteria. Note that if the "Min $ past due" field is set to 0, all past due invoices will receive a Service Charge. This value can also be done from the Service Charges form, the process of which is described below.
  • Minimum Days Past Due - Similar to the "Min $ past due" field, the "Min days past due" field specifies the minimum number of days the invoice must be overdue before Service Charges will be generated. This allows users to set a grace period on overdue invoices. Again, if this is set to 0, there will be no grace period. This value can also be done from the Service Charges form.
  • What other setup is required? - Non-Stocked Service Part - Service Charges take the form of new invoices, one for each Ship-to Company, for the total amount of finance charges for all of that company's overdue invoices. Like all Sales Orders, a part is required on the Sales Order line, and must have a Terms code defined. For Service Charge invoices, a non-stock part must be set as the Service part. To configure a part to be used for service charges, ensure that on the Properties tab of the Part's Item Master, the "Stocked" flag is unchecked and the "Saleable" flag is checked. Non-stocked Parts are also used for various other account charges within DEACOM, including delivery charges. It is important to note that all Revenue accounts selected on the Accounts tab of the Item Master are still required to have a COGS account selected. No COGS transactions will hit this account because it is a non-stocked item.

Generating Service Charge Invoices

How are service charges generated? Once setup is complete to support the generation of Service Charges as desired, the actual generation is simple. Users have the ability, via the “Chargecust” field, to allow the user to select which customer to generate Service Charges for. This column acts as a toggle; Users can double click to change the value from "Yes" to "No" and vice versa. If the field is not present by default, it can be added to the grid.

  1. Navigate to Accounting > Service Charges.
  2. Set the "Transaction Date" to the date that is to be used for calculating and posting the Service Charges.
  3. (Optional) Select an "AR Account" to apply Service Charges to.
  4. Verify that the "Min $ past due" and "Min days past due" have populated from the Accounting > Options > Accounts Receivable tab or modify as desired.
  5. When finished, click the "View" button:
  6. Review the Bill-to and Ship-to Companies listed to validate the Service Charges that are about to be generated. The advanced filter can be used to remove records from this listing if desired. When satisfied with the Charges, click the "Add Charges" button. Note that the Terms code defaults from the Accounting > Options > Accounts Receivable tab for Service Charge terms code.
  7. When satisfied with the Charges, click the "Add Charges" button. Note that the Terms code defaults from the Accounting > Options > Accounts Receivable tab for Service Charge terms code.
  8. User will be prompted to confirm # of service charges. Click "Yes" to continue.
  9. User will receive a system prompt "Do you want to view the invoices to print?" Click "Yes" or "No".
  10. Once Service Charges are generated, the user will receive a system prompt "Finished creating service charges."

Service Charges are handled the same as any other sales invoice. They will show up on a customer statement, they can be paid with a check from the customer, they can be written off to an expense account, etc.

FAQs

Can I generate Service Charges only if the charge is more than a certain dollar amount?

Yes, use the advanced filter to filter out the records that should not generate charges. If for example, you want to exclude charges that are $5 or less, set filter to Charge > 5.00. Users can also set the "Min. $ past due" field on the pre-filter form.

I received an error while generating Service Charges and only partially created the Service Charge Sales Orders. What can I do?

Generate Service Charges again but filter out the customers already processed using the advanced filter before clicking the "Add Charges" button. Set filter to Bill-to Company >= X. Where X is the name of the company it needs to start processing from.