Generating Financial Charges
Before closing the month, it is a good idea to create any financial charge journals so they appear in the correct month. Financial charge journals can be generated for financed clients using this option found under Actions in the Taskbar Menu.
When this Action is selected a screen will be displayed that allows you to set-up the charge and select the clients to charge. All charges are displayed for checking purposes before generation.
Step 1: Set the Interest Ledger Accounts
If you have never generated financial charges in Stockyard before, you will need to set the ledger account/s for the charges to be journaled to.
Using the Test System to understand the outcome of the whole process is helpful in preventing unwanted/incorrect journals being created.
a. Select ‘System Accounts’ from the ‘Maintenance’ menu and click on the ‘Accounting’ tab.
b. Enter the ledger code or search your ledger tree for the Interest Received income account.
If you also pay clients’ interest, set the Interest Paid expense account.
c. Save the settings.
Step 2: Set the Client as Financed in the Ledger
- Open the relevant client accounts in the Ledger.
- Change the ‘Financed’ field to ‘Daily/Overdue’.
Select Daily to calculate interest on a daily basis for all transactions in the accountSelect Overdue to calculate interest on all transactions that have fallen due. Sales still within their pay-by period will be ignored.
c. Click on Save.
The clients with Financial Charges will appear in the summary screen as follows in the Finance column.
The clients with Financial Charges will appear in the summary screen as follows in the Finance column.
Step 3: Create the Financial Charge
a. Go to Actions > Generate Financial Charges
b. Select your Client/s
- If you know the account code for your client, enter it in the space after Accounts and select it when it appears.
- If you don't want to use the code or would like to charge several clients in the same ledger category, click on the drop-down to show the ledger tree.
- Using Search once you see the Ledger Tree will bring up currently financed ledger accounts. They will be mixed as Debtors and Creditors, Daily & Overdue.
- To do a more specific search, click on a specific classification and then click Search eg Buyers/Vendors etc to bring up one specific group of clients. You may then select the daily or overdue clients from this list according to your needs.
To select a group of ledger accounts from the tree, use the Windows Select Keys: hold down the Shift key to select consecutive accounts or Control (CTRL) to cherry-pick certain accounts.
Once you let go of Shift/Control, those selected accounts will be displayed in the Charges window.
c. Set the Charge
Mode: Select either Debtor accounts (creates debit journals) or Creditor accounts (creates credit journals).
Financial Type: Daily Charges or Overdue.
If you have chosen a group of clients to charge, ensure they all correspond to the charge type. Journals for the corresponding Financial Types will be generated only if the match e.g. no journals will be made for the overdue clients in the example below as the charge type is Daily.
Charge Rate (%): Enter the per annum charge rate, up to 4 decimal places.
Lower Limit: If you want to exclude clients with a low balance enter the lower limit amount in this field.
Dates: Enter the
start and end date for the charges to be calculated by selecting from the calendar e.g. weekly/monthly/quarterly dates.
The Journal Batch Date is the date the
financial charge journal will be applied to the client accounts. This defaults to
the ‘End Date’ however you may change it if required.
Step 4: Apply Interest and Generate the Financial Charge Journals
Once all the charge information has been entered, click OK. This does not actually apply the charges but calculates and displays them in a grid for verification.
In the example a 5% per annum charge has been set-up to charge multiple clients for a quarterly period. When the ‘Apply Interest’ button is clicked the above grid is displayed. Journals have not yet been created and you need to verify the accounts about to be charged.
- Clicking in the charge column for a specific client, allows you edit the charge if need be.
- Click Generate Journals once you are satisfied with the outcome and the financial charge journals will be created for each client’s accounts.
- Click Cancel to return to the charge set-up screen to make any necessary re-calculations.
Interest Charges have now been added to the corresponding ledgers and may be invoiced as needed.
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