As a business owner, it is important to consider implementing finance charges as a means of protecting your business’s financial stability and generating revenue.
Finance fees may be used to offset the expense and risk of giving customers credit or loans.
They can also give you a competitive edge in your industry, help cover any administrative costs and act as an incentive for clients to pay their bills on time.
By being transparent about financing rates and terms, your company may show that it is committed to responsible lending, which can help you draw in and keep clients.
Within ServiceWorks, you can create, edit, and set the frequency of finance charges to be added to customer accounts. Here’s a tutorial on how to set that up within the software:
Creating Finance Charges
To begin, open up the Configuration Menu and navigate to Invoice Settings -> Invoice Charges to access where the finance charges are stored. Once in the Invoice Charges menu, click the New Finance Charge button in the upper right corner of the page.
A popup should now appear with the following entry fields:
- Days Old – Enter the number of days old a job ticket has to be before finance charges will appear on the invoice
- Percentage – Set a percentage amount for the created finance charge
- Amount – Set a flat fee amount for the created finance charge
(Note: Both Percentage & Amount fields must be filled in before you can save the finance charges. The system will use whichever amount is larger when applying the charges)
Once finished with your selection, click Save to continue.
Before moving on to the next step, be sure that the Add Financial Charges box is checked under the Other Option section
Enabling Finance Charges
Now that the finance charges have been set up, you’ll need to make sure that they are being applied to customer accounts. You can do so by navigating to the customer view, selecting Edit next to the customer’s information, and then clicking the Add Financial Charges checkbox. This can also be done while creating a new customer as well.
Once enabled, be sure to click Save to record your changes. The financial charges should apply to the customer account whenever the Days Old criteria has been met.
Note: In order to increase the percentage of finance charges over time, you will need to set up each corresponding charge within ServiceWorks (i.e.: 10% after 30 days, 15% after 60, etc). The charges will not add up on their own over time.