Question

Late Fees

Forum|Forum|5 years ago
September 14, 2020
2 replies
0 views

Hello QB Community,

New to QBOnline and I have a question no one seems to be able to answer.

I have enabled Automatic Late Fees within my account. This is working as expected, except for 1 component - partial payments... Here is the scenario:

- Customer has an invoice of $1600

- Invoice becomes overdue and after the grace period the system automatically applied the 5%/month Late Fee rule. This bring the total invoice amount to $1680.

- Customer makes a payment of ($1600) - which covers the principal, but not the total with late fee.

- When I "Receive Payment" on the invoice there is no option of where to apply the $1600. I simply put in the paid amount. This reduces the invoice to $80 owed and shows the status as "20 Days Overdue (Partially paid)"

Everything seems straightforward to me at this point. Then I look at the project and find that the system seems to automatically apply partial payments to Accounts Receivable & Late Fee Income.... How and Why? Of the $1600 paid, it applied $1523.81 to Accounts Receivable and $76.19 to Late Fee Income...

Why did it do this, how did it come up with these numbers, and is there a way to fix this? I would have thought it would apply the $1600 to the original balance (since that's the 1st line item on the invoice) and then paid the remainder to Late Fee Income upon final payment.

Can anyone help? Thanks!

QuickBooks Online

C

Catherine_B

Welcome to the Community, intelivant consulting!

I do appreciate the detailed steps you've provided. The system thinks that the $1,600.00 you applied to the payment already includes the late fee. When you pay the remaining balance of the invoice, QuickBooks will still think that it includes the late fees which will automatically be assigned to the said accounts.

You can manage the affected accounts through the transactions journal. I'll show you how:

Open the payment you created.
In the Receive payment page, click More at the bottom menu.
Select the Transaction journal option.

From there, you'll see the account and amounts affected by the payment you created. If you need more help with managing your late fees, you can check ou this article: Set up and apply automatic late fees to invoices.

We also have Community Help articles that will give you more details in any section with QuickBooks you need assistance with.

Feel free to leave a reply below or post again. The Community is always available 24/7. You take care and have a great day!

intelivant consultingAuthor

Hi @Catherine_B,

Thank you for your response. It was very helpful, as I did not think about the Transactional Journal. That said, now the plot thickens...

I clicked on the invoice. As expected, in the upper right-hand corner it shows "1 Payment Made ($1600)". I click that link which open the Received Payment. I think click more and go into the transactional journal. The transactional journal shows all $1600 going to Account Receivable - no mention of the Late Fee Income anywhere to be found.

That said, when I go to the Transactional Report, it only shows $1523.81 going to Accounts Receivable. If I then run a report on the Late Fee Income Chart of Account - it shows the remainder of $76.19.

Very strange! Thoughts?

Thanks!

Kristine Mae

I've replicated your concern, Intelivant consulting. The amount wasn't divided on my end.

I suggest reaching out to our customer care support so an agent can take a better look at this. They have more tools, like screen sharing, than can help you. Here's how:

Click Help inside QuickBooks Online.
Select Contact Us.
Enter "Late fee concern" in the description field, then click Let's talk.
Select either Get a callback or Start messaging.

Once it's fixed, you can open the Transaction journal report again. Then, check if the amount is no longer divided.

You can always visit the Community if you have other concerns. Take care!

A

Adcpa

I am having the same problem and in addition it applies partial payments pro rata to sales tax also so my sales tax payable is wrong due to some of the payment being applied to finance charges that the customer did not pay. Help!!

Bryan_M

Hello, Adcpa.

I can help clear the confusion and fix the issue with the payment and late fees.

The system may think that the money you applied to the payments includes the late fee. When you pay the remaining balance of the invoice, QuickBooks will still think that it includes the late fees.

The fees will then be automatically assigned to the accounts affected.

The affected accounts can be managed through the transaction journal.
Here's how:
1. Open the payment you made.
2. Select the Receive payment.
3. Click the More button below.
4. Choose and click the Transaction journal.
Once done, the affected accounts and amounts by the payment you made will show.

For us to know why your sales tax payable is wrongly due, could you tell us the amount applied to the finance charges that your customer did not pay?

If you want to learn about how you can manually apply late fees as a line item on older invoices, you can read through this article: Add product and service items to QuickBooks Online.

Click the Reply button below if you have questions about late fees and invoices. I'm always here to help. God Bless.

I

ingrid388

@Bryan11_2_ I hope you can help us with our late fee problem. We issue an invoice in April, we have late fees activated so that they are issued if a balance is past due with a 5 day grace period. When a late fee is calculated in May, it adds the late fee to the invoice, a retroactive transaction to April! Why is that?

Sign up

Login with SSO

Login to the community

Login with SSO

Scanning file for viruses.

This file cannot be downloaded