In ABSS software, you can control credit by:
Credit limits
A credit limit is the maximum amount of credit you allow a customer to charge to their account. You can set a default credit limit for all new customers or set a specific credit limit for a single customer.
To enforce credit limits, you can set your preferences to:
- warn users before recording a sale that will exceed a customer's credit limit
- prevent certain users from recording a sale that will exceed a customer's credit limit. When you use this preference, you set an override password to allow approved users to record the sale.
To set or change the credit limit for a single customer
- Go to the Card File command centre and click Cards List. The Cards List window appears.
- Click the Customer tab and select the customer for whom you want to set a credit limit.
- Click Actions and choose Edit Credit Limit & Hold. The Credit Limit & Hold window appears.
- Type the customer's credit limit in the Credit Limit field
- Click OK. The Card Information window appears
- Click OK to return to the Cards List window
To receive a warning when a customer exceeds the credit limit
- Go to the Setup menu and choose Preferences. The Preferences window appears.
- Click the Sales tab.
- Select the If Credit Limit is Exceeded on Sale preference and select Warn and Continue from the drop-down list.
- Click OK.
To prevent the recording of a sale when a customer exceeds the credit limit
- Log in to your ABSS company file as Administrator.
- Go to the Setup menu and choose Preferences. The Preferences window appears.
- Click the Sales tab.
- Select the If Credit Limit is Exceeded on Sale preference and select Prevent Unless Overridden from the list. The Credit Limit Override Password window appears.
- Type an override password and password confirmation
- Click OK. The Preferences window appears.
NOTE : Changing the credit limit override password If you are logged into your company file as the Administrator, you can change the credit limit override password in the Credit Limit Override Password window. To open this window, choose Preferences from the Setup menu, click the Sales tab and then click Set Override.
- Click OK to close the Preferences window
Credit holds
You can place a credit hold on a customer's account to prevent further sales being made to the customer. For example, you may want to place a customer on credit hold when the customer's account is overdue.
To place a customer on credit hold
- Go to the Card File command centre and click Cards List. The Cards List window appears.
- Click the Customer tab and select the customer that you want to place on credit hold.
- Click Actions and choose Edit Credit Limit & Hold. The Credit Limit & Hold window appears.
- Select the Place this customer on Credit Hold option.
- Click OK. The Card Information window appears.
- Click OK to return to the Cards List window.
NOTE : Recording sales to customers on credit hold To record a new sale, you will need to remove the credit hold. To do this, deselect the Place this customer on Credit Hold option in the Credit Limit & Hold window for the customer's card.
Finance charges paid by customers
Finance charges are amounts added to an outstanding balance as a penalty for late payment. A finance charge is added to a customer's statement. The amount paid by a customer to cover the charge is then recorded in the Receive Payments window.
To set up finance charges
- Go to the Setup menu, choose Linked Accounts and then Sales Accounts.
- Select the I assess charges for late payment option and select an income account to record the late payment charges.
- Click OK
- Go to the Card List in the Card File command centre, then select the Customer tab.
- In the % Monthly Charge for Late Payment field of the Selling Details tab of the customer card you want to charge, set the percentage you will be charging for late payments and click OK.
To record a finance charge
- Go to the Sales command centre and click Print/Email Statements. The Review Statements Before Delivery window appears.
- Click Advanced Filters and select the Add Finance Charges to Amount Due option.
- Select any other report filters you want to apply and click OK.
For more information about customer statements, see 'Send customer statements'.
When your customer pays the late-payment charge, enter the amount in the Finance Charge field of the Receive Paymentswindow. For more information, see 'To record payments against invoices'.
To receive finance charge payments
- Select Receive Payment from the Sales command centre. The Receive Payments window appears
- Type the full amount received and fill in the transaction details. See 'To record payments against invoices'.
- Type the late fee amount in the Finance Charge field and click Record.
Tracking finance charges Although the history of finance charges is not tracked, you can perform an account inquiry (using Find Transactions) on the income account you have set up to record late charges
The finance charges payable by your customers only appear on their statements, so you may want to keep copies of the statements sent to customers.
How finance charges are calculated For each open invoice, ABSS software calculates its due date using the terms specified in the Selling Details tab of the Card Information window. The overdue balance is then increased by 1/30th of the monthly charge for late payment for every day it is overdue.
The monthly charge is calculated by multiplying the amount overdue by the % Monthly Charge for Late Payment value you specified in the customer's card.
If the customer makes a partial payment during the overdue period, the finance charge is adjusted accordingly.
Deleting finance charges When you enter a finance charge in the Receive Payments window, 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.
Therefore, if you want 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.