hi I'm Aimee from Razor Accounting the sharp solution for your finances! In this
QuickBooks desktop tutorial I'm going to show you how to add an interest charge
to your customers invoice you may wish to do this if your customer has an
outstanding invoice that they have not paid within your specified payment terms
so now you want to do two things one you want to get their attention by sending
them a new invoice with an interest charge tacked on and two you want to
reap a little benefit of earning some interest income because of the fact that
you weren't paid on time so let's get started now before you go ahead and
start charging your customers interest on their invoices that they haven't paid
on time the first thing you need to do is communicate the information to them
that there will be interest charged so an easy way to do that would be to add
your payment terms and your interest rate directly to your invoice as you can
see this invoice that I have up on the screen right now has some really basic
information on it and it wouldn't give the customer an idea that there is going
to be an interest charge so I'm going to show you how to add those two items to
your invoice really quickly here we are at the QuickBooks home screen now if you
want to customize your QuickBooks invoices what you need to do is go up to
the top menu where it says lists go down to where it says templates and open up
templates and from here you do need to know which QuickBooks invoice out of the
ones that are here you are generally using when you issue invoices to your
customers the one that I usually use is called Lucy's pet shop invoice and this
is an invoice that I customized if you would like to learn how to customize
your invoices I do have a tutorial on that
it's called QuickBooks premier how to customize invoices and accounts
receivable and I have a link to that video in the notes to this video so you
can find it easily so I'm going to open up this invoice template by double
clicking on it and as you can see there is a preview
here of my invoice so the first thing that I want to do is to add my payment
terms to the invoice and the way to do that is to go over to the bottom here
where it says additional customization and open that up and I want to stay in
the tab in here that says header and go down towards the middle where it says
terms go over to the right and you'll see a box here and this is where you are
going to fill in your payment terms for your business - says in that 15 which
means I would like the customers to pay within 15 days of the invoice date so
I'm going to leave that as is and to make that show up on the invoice you
need to check the box here right under where it says print so go ahead and
check that box and you'll notice once you check that box that your invoice
preview has been updated and that new item has been added to your invoice now
I'm going to move along and add on the note about the interest so I'm going
over to the tab that says footer and down towards the bottom you'll see that
there is a large text box here and I've already filled in my interest
information it says in here 2% interest charged on overdue amounts so go ahead
and fill in your interest rate in the text box provided here and when you're
done filling in the information you want to again check the box under print here
and that will make the information show up on your invoice as you can see it has
been added over here and it's not in the best location and you'll also notice
that the color of the font does not match the rest of my invoice so I'm
going to correct those issues right now by going into the layout designer here
at the bottom and this is where you can make a lot of different changes so the
first thing I'm going to do is move the payment terms box I'm going to move it
up
and while this is selected I'm going to go up to the top left side of the screen
where it says properties and I'm going to change the color of the font by going
down and selecting font and I'm going to come down to the bottom here and change
it from black to Navy so it matches the rest of the invoice I'm also going to
increase the size of the font here to 12 and then I'm going to select okay and
the next thing I'm going to do is change the border at the border on this text
box is black and I would like it to be blue to match the rest of the invoice so
I'm going to select blue here and then I'm going to select ok and ok again and
you'll see that the text box has been changed already now I'm going down
towards the bottom to change the interest terms so as you can see it's
not in the best spot so I'm going to move it down and over a little bit and
then I'm going to double click on it and this is another way of editing it so you
can just double click on your text box and the properties will open up for you
I'm going to change the font again to Navy and I'm going to change the text
size again and then I'm going to select ok and ok again and that's it so I've
made the changes for my fonts it looks better than it did before but I still
have this box here that I don't need this as sample so I'm gonna go ahead and
select it by clicking on it and then I'm just gonna hit delete on my keyboard to
get rid of it so I'm finished making my edits I'm going to select ok and now I
have my preview again so we have added our payment terms and interest rate to
the invoice but if you really want to get your customers attention you can add
a past-due stamp to the invoice too so I'm going to select ok here to get
out of this screen and I'm back at the main menu and you'll notice over here on
the left side is a little box that you can check that
says print past-due stamps so I'm going to select that
and then I'm going to select okay I'm going to exit up here and I'm going into
create invoices now I'm going to find the past-due invoice that I would like
to add the interest charge to you so I'm going to select ctrl + F or else you can
go up to the find box on the top left here and select your invoice by
scrolling through your customer job or you can actually put in an invoice
number if that's easier for you my overdue invoice is under mr. black so
I'm going to select find and it came up right away so if you look at the upper
left side of the screen you'll see that there is a past due note on this invoice
so say if the customer was only overdue by one or two days and you just wanted
to let them know you can print them an invoice that has this past due stamp on
it and submit it to them just to give them
a friendly reminder but if you do move forward with editing this invoice and
adding on an interest charge this past due stamp is going to disappear because
you've changed the invoice the next thing that we're going to do is create a
line item called interest within this create invoices screen so I'm going to
go right underneath my previously recorded revenue for the client and I'm
just going to click underneath here in the item column and I'm going to select
add new and I'm going to keep the new item under the service category and in
the item name I'm going to put interest
I'm going down to the description box and I'm going to put in interest on
overdue account next I'm going to fill in the interest rates so I'm just going
to click in the rate box I'm going to put in 2% and going down I'm going to
select the appropriate tax code for my business and in the account we want to
select an account called interest income if it's available in the general ledger
and if you don't have that we can create it now so I'm just gonna go up to the
top and select add new and the account name is going to be called interest
income I'm not gonna make it a sub account I'm not gonna fill in the
description I think that account name is good enough for this one and in the tax
line mapping this is an income account so go down and find your revenue
accounts so here is the intersection and I'm going to put it into interest income
and I'm going to select loan interest and once you're finished filling in the
information for your new general ledger account go ahead and select save and
close now we've added in a new general ledger account called interest income
I'm going to select ok and as you can see the 2% interest has been added it's
calculated it as six dollars and fifty cents and the total is at the bottom so
once you're done with your transaction you can print the invoice for your
customer by going up to the top and selecting print and invoice or if you
want to look at it before you print it you can go to your print preview so
looking at the print preview of this invoice we have added in
the payment terms here at the top it says net 15 I've also added in the
interest rate down here at the bottom and there is a clear description here of
the additional amount added to this customer invoice it says here interest
on overdue account it says the rate is 2 percent and they've been charged a total
of 6 dollars and 50 cents and then the tax has been recalculated on the total
invoice amount and the balance due is at the bottom so sending this updated
invoice to your customer is a good way of getting them to pay on time and
letting them know that if they don't pay on time that they're going to be paying
interest so that's all for this QuickBooks desktop tutorial on how to
charge your customers interest on an invoice if you do have any questions
please leave a comment on this video and I will be happy to answer your question
as quickly as I can and if you like this video if you found
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thank you for watching