Fixing Finance Charge

Q. How do you fix the finance charge if you didn’t catch it when an associate overpaid?

A. When a finance charge occurs, two transactions are recorded—the full customer payment, including the finance charge, is recorded in the receipts journal and a transaction for the finance charge is recorded in the sales journal.

IF the finance charge occurred in the CURRENT period, you can delete the entries and re-record the payment correctly.

To delete a finance charge payment, you must delete both transactions. If only one entry is deleted, the Receivables Reconciliation Summary report may show an out‑of‑balance amount equal to the finance charge. When you delete one of the entries, you are reminded to delete the other entry for the finance charge. Note that a warning appears even though you may have already deleted the corresponding invoice or payment.

IF the finance charge occurred in a PRIOR period, you can reverse the entries with a current period date and re-record the payment correctly with a current period date. To reverse a finance charge payment, you must reverse both transactions. If only one entry is reversed, the Receivables Reconciliation Summary report may show an out‑of‑balance amount equal to the finance charge. When you reverse one of the entries, you are reminded to reverse the other entry for the finance charge. Note that a warning appears even though you may have already reversed the corresponding invoice or payment.