Overdue Charges: Implementation Activity

In the following implementation activity, you will learn how to implement the overdue charges functionality.

Story

Suppose that starting on January 1, 2023 the CFO of SweetLife Fruits & Jams decided to start applying overdue charges to customer documents that are past due. Overdue charge documents should be generated for two customers that have multiple past due documents—COFFEESHOP and GOODFOOD. The overdue charges should be calculated for the days past due by using the outstanding balance of a document for each of these days. The annual rate for overdue charges is 10%.

Acting as the chief accountant, you need to enable the needed feature and set up the overdue charge functionality.

Process Overview

In this activity, you will first enable the Overdue Charges feature on the Enable/Disable Features (CS100000) form. On the Overdue Charges (AR204500) form, you will create an overdue charge code and specify its settings. On the Statement Cycles (AR202800) form, you will update the settings of the EOM statement cycle and select the new overdue charge code for it. On the Accounts Receivable Preferences (AR101000) form, you will update the AR settings to make the system calculate overdue charges by statement cycle. On the Customers (AR303000) form, you will turn on the calculation of overdue charges for the COFFEESHOP and GOODFOOD customers. Finally, on the Invoices and Memos (AR301000) form, you will apply calculation of overdue charges for particular open invoices of these customers.

System Preparation

Before you start implementing the overdue charge functionality, launch the MYOB Acumatica website, and sign in to a company with the U100 dataset preloaded. You should sign in as the chief accountant with the johnson username and the 123 password.

Step 1: Enabling the Needed Feature

To enable the Overdue Charges feature, do the following:

1. On the Enable/Disable Features (CS100000) form, click Modify on the form toolbar.
2. Select the Overdue Charges check box within the Advanced Financials group.

   The check boxes for the other needed features are already selected because you have preloaded the U100 dataset into the company; you do not have to change the selection of any other features.

3. On the form toolbar, click Enable.

Step 2: Creating an Overdue Charge Code

To create an overdue charge code for 10 annual rate, do the following:

1. On the Overdue Charges (AR204500) form, create a new record.
2. In the General Settings section, specify the following settings for the new code:
   • Overdue Charge ID: OVERDUE10
   • Description: Overdue charges of 10% annually
   • Calculation Method: Interest on Prorated Balance

     This calculation method means that the system will calculate overdue charges for the days past due by using the outstanding balance of a document for each of these days. The overdue document is subject to charges until it is closed. If overdue charges have been recorded for the document, the system calculates the charges for the number of days since the date of the last overdue charges.

   • Terms: 30D

     These credit terms will be inserted into the generated overdue charge documents.

   • Overdue Charge Account: 41000 (Overdue Charge Income)
   • Tax Category: EXEMPT
3. In the Charging Settings section, specify the following settings for the new code:
   • Total Threshold: 5

     This box specifies the minimum amount of the overdue charge on which the system initiates the generation of a document of the Overdue Charge type.

   • Charging Method: Percent With Threshold

     If this method is selected, the overdue charge will be calculated as an annual percentage of the open balance of the document.

   • Threshold: 0

     The system compares the charge amount calculated for each overdue document with the threshold amount specified in this box to check whether to include the charges as line items to the generated Overdue Charge document. A threshold amount of $0 means that the charges calculated for all overdue documents will be included in the generated Overdue Charge document as is.

     Tip:

     If you specify a particular amount in this box, the calculated overdue charges whose amounts are less than the threshold amount will not be included in the generated Overdue Charge document.
4. In the table that appears when you select the Percent With Threshold charging method, add a row with the following settings:
   • Start Date: 1/1/2023
   • Percent Rate: 10

     This is the annual percentage rate to be used for calculation overdue charges.

5. On the form toolbar, click Save to save the changes.

Step 3: Updating the Settings of the Statement Cycle

To update the settings of the EOM statement cycle, do the following:

1. On the Statement Cycles (AR202800) form, open the EOM statement cycle.
2. In the Finance Charge Settings section, select the Apply Overdue Charges check box to make possible the use of overdue charges for the statement cycle.
   Tip:

   If you want to make the system show a warning message on the Prepare Statements (AR503000) form if there are overdue documents for which no overdue charge documents have been generated, you need to select the Require Overdue Charges Calculation Before Statement check box for the needed statement cycle.
3. In the Overdue Charge ID box, select the OVERDUE10 code. The system will use this code when calculating overdue charges for customers that use the EOM statement cycle.
4. On the form toolbar, click Save to save the changes.

Step 4: Updating the Accounts Receivable Preferences

To update the AR preferences, do the following:

1. Open the Accounts Receivable Preferences (AR101000) form.
2. In the Data Processing Settings section on the General tab, select the Set Default Overview Charges by Statement Cycle check box.
3. On the form toolbar, click Save to save your changes.

Step 5: Setting Up the Calculation of Overdue Charges for Customers

To update the settings of the COFFEESHOP and GOODFOOD customers, do the following:

1. On the Customers (AR303000) form, open the COFFEESHOP customer.
2. On the Financial tab, select the Apply Overdue Charges check box. The system calculates overdue charges on documents of only customers for which this check box is selected.
3. On the form toolbar, click Save.
4. In the Customer ID box, select GOODFOOD.
5. On the Financial tab, select the Apply Overdue Charges check box.
6. On the form toolbar, click Save.

   The newly created invoices to COFFEESHOP and GOODFOOD will have the Apply Overdue Charges check box selected. The previously created invoices for these customers (which were created before you enabled the calculation of overdue charges for the customers) currently have the Apply Overdue Charges check box cleared. You need to select this check box in the invoices manually if you need to calculate the overdue charges for these invoices.

Step 6: Updating the Settings of Overdue Invoices

To update the settings of existing overdue invoices to make the system calculate overdue charges for them, do the following:

1. Open the Invoices and Memos (AR3010PL) list of records.
2. In the table, filter the documents of the COFFEESHOP customer as follows:
   1. Click the Customer column.
   2. In the dialog box that is displayed, specify the following settings:
      • Equals: Selected
      • Customer lookup box: COFFEESHOP
   3. Click OK to close the dialog box and apply the filter.
3. In the table, locate an invoice in the amount of $5,300 and open it.
4. On the Financial tab of the Invoices and Memos (AR301000) form, which is opened, select the Apply Overdue Charges check box.
5. On the form toolbar, click Save to save the changes.
6. In the Reference Nbr. box, open the lookup table.
7. In the table, find an invoice for the GOODFOOD customer in the amount of $3,030 and open it.
8. On the Financial tab, select the Apply Overdue Charges check box.
9. On the form toolbar, click Save to save the changes.