Reminder Invoices on unpaid accounts

[Adrien Monteleone]

David,

What you are really looking for to send 'reminders' is normally known as a Statement of Account. This is like what credit card companies send out every month. They show balance forward, payments, additional purchases, interest on balances, late fees, etc.

GnuCash unfortunately, does not yet have such a feature. You could use the Customer Report to show a basic Statement of Account, with aging, but there are no business features for charging interest and/or late fees, or special places on the report for those charges.

I see you have several options:

1) You can either edit the invoice, adding the interest, then reposting. (and re-applying any payments that got dissociated when you unposted the invoice - can be quite a mess, I would not recommend this route)

or

2) You can 'pay' the remaining balance on their invoice(s) using an A/R clearing account, then write a new invoice with a 'Balance forward line' and use the amount you 'paid-off' as a line-item charge to them, then add your interest/late fees, then post and issue the new invoice. (more like what you are doing now, but avoiding the duplication of amounts owed)

or

3) You can make a new invoice for just the interest/late fees. (maybe even append 'INT' or something to the invoice # if that fits in your scheme to make it helpful to spot them) You could then easily use the Customer Report with the Show Payments setting as a Statement of Account. (probably, the sanest method following normal business processes as long as GnuCash doesn't support proper Statements of Account and the ability to charge interest and late fees without a matching invoice.)


While option 2 above is closest to what you are doing now, I'd highly recommend using option 3. It is more in line with how you are really treating your customer accounts, allows you to use the Customer Report as a 'Statement of Account' (and even rename it accordingly), and does not require any correcting entries.

Continuing down the option 2 path would require you to check the total customer balance each time to see how much to reverse with a clearing account and then re-charge on a new invoice. The benefit to using the Customer Report is that it allows you to show activity for any desired date range, AND will show proper aging of the balance owed. (some parts of the balance may be 30 days, others 90, etc.) By re-issuing a new invoice with current balance as in option 2, the original due date gets lost and becomes a moving target.

Option 3 can also get a little help from GnuCash in that you could create a line item on the invoice for a specific interest rate with a unique description, set the 'price' to the interest rate, and then enter the balance you are applying it to as the 'qty'. This way, GnuCash will auto-fill the rest of the description AND price/rate next time you start typing it on an interest invoice, and all you have to do is change the QTY field to their balance forward. This saves time in calculation, and you can use different interest rates for different customers. You could shave some more time by duplicating a previous months INT invoice and simply updating the QTY to the new balance forward. Duplicating will also result in using the same interest rate for that customer as the last time, so you don't have to otherwise keep track or manually choose it.

Certainly you could take the option Liz suggested to offer early payment discounts, which generally do work better than late-payment interest penalties, but until GnuCash implements automatically applying discounts based on payment windows, you'll find yourself manually charging back the discount amounts to their accounts when they are late. (that is, with additional invoices, similar to option 3, but certainly less frequently) You can also combine this with option 3, as more than likely, not everyone will pay early for a discount, or even on time, and you'll still find yourself charging interest occasionally.

Regards,

Adrien



> From: David Lark <david at davidlark.net>
> Date: March 16, 2016 4:17:28 AM CDT
> To: gnucash-user at gnucash.org
> Subject: Reminder invoices on unpaid accounts
> 
> 
> Fellow GC users:
> 
> When a customer account is not paid in full, I have the need to send an additional monthly invoice. This invoice would ideally take the following form:
> 
> * New line items (posted to accounts receivable).
> * Subtotal for the above.
> * + Amount due from previous invoice(s).
> * - Payments received.
> * + Interest on unpaid balance (posted to A/R).
> * = Total due now.
> 
> Just creating a new invoice with the past due amount entered as a line item would result in the past due amount showing up twice in A/R. The only way I can think of to do this is to create the invoice, and negate the original amount in a subaccount, perhaps called "Delinquency Rollover" or some such.
> 
> It seems as if the A/R capabilities of GC aren't quite there yet. Or perhaps my brain is what is missing some features. How do you deal with this situation? All ideas will be welcome.
> 
> David