How to Set Up Finance Charges

T. L. Hawkins

2 years ago

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:

Enabling Financial Charges

To begin, log into your ServiceWorks account and click on the cogwheel in the right corner of the toolbar to open up the Configuration Tab.

Once opened, navigate to Invoice Settings, and then click Invoice Charges.

In the following menu, you’ll see several options for setting up finance charges. The first thing you will need to do is click on Activate Financial Charges Settings to enable the use of this feature within your ServiceWorks account

In order to apply finance charges to customer accounts, apply charges automatically to all accounts, or have the option available to manually add charges to invoices, this checkbox will need to be enabled. Otherwise, these options will not appear in your account.

Once clicked, you’ll be given the option to enable finance charges to all existing customer accounts

If you click Yes: The “Add Financial Charge” checkbox will be enabled for all existing customer accounts. New accounts created after this point will also have this option enabled upon creation

If you click No: The “Add Financial Charge” checkbox will remain as it is for all existing accounts. New accounts created after this point will have the financial charge checkbox enabled upon creation.

Once you are finished with your selection, you should receive a confirmation message of the process chosen.

If you’ve opted out of applying finance charges to all existing customers during activation, you still have the ability to add finance charges 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.

If you’ve opted to apply finance charges to existing customers, you still have the ability to mark customers exempt by using this same process as above, but disabling the Add Finance Charges toggle instead

Creating Finance Charges

Now that you’ve enabled the use of finance charges within your account, you’re ready to begin creating finance charges to be applied.

Start by clicking the New Finance Charge button within the Invoice Charges menu:

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: Either the Percentage or Amount fields must be filled in before you can save the finance charges. In situations where both are applied, the system will use whichever amount is larger when applying charges)

Once you are finished with your selection, click Save to continue. This process can be completed as many times as needed.

Applying Finance Charges

Once enabled and created, you’ll have several options on how to apply finance charges to your invoices:

Automatically Applying Finance Charges

To apply your finance charges automatically, navigate to Invoice Settings and then click on Statement Process

In the statement process menu, click the checkbox next to Add Financial Charge Automatically. This will apply your financial charges in accordance with your currently setup finance rates.

Manually Applying Finance Charges

There are a few places where you can manually apply finance charges when active:

You can apply charges manually within the statement menu. Hover over the Accounting section within the toolbar and select Statement from the dropdown

Once you’ve reached the Statement menu, you’ll need to change the month in the customer section to the current month. Otherwise, this message will appear at the top of the page:

Once on the current month, you should see the Action button as well as the Finance Charge column appear on the page

Clicking on the checkbox next to a customer name and the action button will make the Apply Finance Charges option appear, adding financial charges based on your current settings

In the Finance Charge column, you’ll have two options: Get Financial Charge and Apply Financial Charge

Using the Get Financial Charge button will calculate the charges based on your current finance charge settings when clicked. You can then select to apply the charge, or cancel the addition of the charge

Using the Apply Financial Charge button will apply the charge in the same way as the action button, basing the charges on the current configurations.

Note: If you’ve decided to opt in to automatically applying finance charges, the option to manually apply charges will still be available for use.

Review and Tips

This will cover how to utilize your finance charges within your ServiceWorks account. Here’s a brief summary of what you’ll need to know to ensure a smooth and efficient process:

Turning On Finance Charges: To enable finance charges, simply check the “Activate Finance Charges Settings” box. If disabled, these options will not be available for use.
Adding Charges Automatically: Want your system to automatically calculate and apply finance charges? Check the “Add Financial Charges Automatically” box. Otherwise, you can manually apply them later.
Controlling Charge Options: When finance charges are on, you can decide:
- Manually Add Charges: If “Add Financial Charges Automatically” is unchecked, use the “Add Finance Charges” option on the customer edit page or the “Action Dropdown” (Apply Financial Charges link) on the statement page to add them manually.
- Automatic Charge Visibility: If “Add Financial Charges Automatically” is checked, you’ll still see the “Add Finance Charges” option for reference, but adding charges manually becomes unnecessary.
Existing Customers and New Settings: When you activate finance charges, you can choose whether to apply them to existing customers:
- No Change for Existing Customers: Select “No” to keep the existing settings for each customer.
- Apply to All Existing Customers: Select “Yes” to activate the “Add Finance Charges” setting for all existing customers. New customers will automatically have this setting enabled.

Note: In order to increase the percentage of finance charges over time, you will need to set up each increasing charge within ServiceWorks.

For Example:

If an invoice has a finance charge of 10% for the first 30 days, on day 31, the finance charge would be applied.

However, at 61 days, another 10% wouldn’t apply. You would need to create an additional finance charge for the 60-day period in order for that to apply, as well as any other period of days in which a finance charge should be applied.

Each line acts as its own individual finance charge; the charges will not add up when applied