Help Centre › Money
Interest on overdue accounts
Charge a monthly finance charge on accounts that are not settled on time — and review it before it reaches a client.
Your practice can charge interest each month on accounts that have not been settled. It is off until you turn it on, and even then nothing is charged without a run being prepared and — unless you choose otherwise — approved by somebody.
Setting it up#
Settings›Interest on Overdue Accounts
The screen is four cards, in the order the decisions are made: What you charge, Who you never charge, When it runs, and What the client sees. The line across the top always states what is happening now, so you can tell at a glance without reading the rest.
Tick Charge interest on overdue accounts and the rest appears.
The rule#
What you charge is written as a single sentence you can read back, with the numbers as boxes in the line:
- Charge a percentage — or a flat fee, a fixed amount per overdue account.
- At 2 % per month. This is capped — see below.
- On balances more than 30 days overdue: 30, 60 or 90. This month's invoices are never charged.
- Plus 5 days' grace, so a payment in transit does not attract interest.
Underneath sit Simple and Compound. Simple leaves interest already charged out of next month's sum; compound includes it.
Seeing what it would charge, before it charges it#
Directly beneath the rule, the screen works the numbers against your real accounts and shows what a run would do today — how many accounts out of how many, the total, and the largest few charges by name. Change the rate and that figure moves with it.
Nothing is charged by looking. Use it to sanity-check a rate before you save: a mistyped figure is obvious here and very hard to spot once it is on two hundred statements.
The monthly run#
Settings›Interest Runs
Interest is charged as a run — one per practice per month. A run is prepared first, which charges nobody, and posted second, which is what puts the charge on each client's account.
- Open Interest Runs from the Settings menu.
- Press Prepare this month's run. This builds the list. Nothing has been charged yet.
- Go through the list and waive anyone who should not be charged.
- Press Post and confirm.
Reviewing and waiving#
The list shows every account that owes anything, including the ones that will not be charged, with the reason next to each. That is deliberate — "why was this client not charged?" is much easier to answer from the list than by working it out again.
| Reason | Means |
|---|---|
| Balance below the minimum | They owe less than your minimum balance. |
| Interest below the minimum | The charge would have been smaller than your minimum charge. |
| Client is flagged never to be charged | Their record has the never-charge-interest tick. |
| Nothing overdue | What they owe is not old enough yet. |
| Account in credit | They are in credit. |
| Interest has reached the amount owed | The in duplum rule — see below. |
| Waived on review | Somebody took them off this run by hand. |
Press Waive on any line to take that client off the run — the line stays on the list marked as waived, so the decision is recorded rather than disappearing. Put back undoes it. Both only work while the run is still a draft.
The line under the heading tells you the rule these figures came from — "Charged at 2% a month on balances 30+ days overdue" — with a link to the Interest settings beside it, for when the numbers look wrong and you want to go and change them.
Undoing a run#
A run that has been posted can be reversed. Every interest charge it made is credited back, each client ends up owing exactly what they did before, and the month becomes free to prepare again.
Open the run from Interest Runs and press Reverse.
Who you never charge#
The second card on the settings screen collects everyone who is left out, whatever the rule says:
| Left out | Means |
|---|---|
| Accounts in credit | Always. A client who owes nothing is never charged. |
| Clients flagged “never charge interest” | Set on the client's own record — see below. The card names everyone currently flagged. |
| Accounts owing less than | Small balances are left alone entirely. Set the figure here. |
| Anyone whose interest would come to less than | Stops the run posting amounts too small to be worth explaining to anybody. |
Never charging a particular client#
Client record›Edit›Additional Information
Tick Never charge this client interest on their record and they are left off every run from then on, whatever they owe. Staff accounts, family, and anyone on an arrangement are the usual candidates.
The Who you never charge card on the settings screen lists everyone currently flagged, so you can see the whole exempt list in one place.
What the client sees#
One line on their statement, dated the day the run was prepared. It appears on the account like any other charge and can be paid like any other charge.
The wording is yours: the What the client sees card on the settings screen holds it, and whatever you type there is what appears on the statement. It ships as “Interest on overdue balance”.
The in duplum rule#
Unpaid interest may never grow past the amount of the original debt. Once the interest standing against an account has reached what the client actually owes, the run stops charging that account and shows Interest has reached the amount owed against it.
The last charge before the ceiling is trimmed to whatever room is left, rather than overshooting it.