Finance Charge Balance Remains on Customer's Card
Two separate transactions are created when a finance charge is received as part of a payment on an invoice. The first is the booking of the finance charge, which is recorded as a debit to Accounts Receivable and a credit to the Finance Charge Income account indicated in the linked income account for Late Fees under Setup > Linked Accounts > Sales Accounts. AccountEdge records this transaction as a Receive Payment transaction, debiting and crediting as indicated above. The second transaction is the payment of the finance charge, which is also recorded as a Receive Payment transaction.
If an open invoice existed for a customer in the amount of $5,000.00, and it had a finance charge of $100.00, a booking transaction would be created for $100.00, debiting that value to Accounts Receivable. The $5,100.00 ($5,000.00 invoice + $100.00 finance charge) payment would be credited to Accounts Receivable, satisfying both the invoice amount and the finance charge.
The same transactions would be created if a customer had overpaid an invoice where no finance charge existed. If the overpayment was applied as a finance charge, the booking transaction would be created.
Suppose a customer has a $500 invoice. He sends you a check for $510.00 and you apply it to the customer's invoice under Receive Payments. Instead of applying the full $510.00 to the invoice, and letting the $10.00 remain as a credit on the customer's account, you apply $500.00 and let the $10.00 drop into finance charge. AccountEdge will have created a booking transaction for the $10.00.
Balance on Customer's Card
If after this transaction is posted, you realize that the overpayment should have been booked as a customer credit, and not as a finance charge, you would need to correct the transaction. The correct procedure is to DELETE the Receive Payment transaction recorded in the receipts (CR) journal, and the booking Receive Payment transaction, recorded in the Sales Journal (SJ). If you leave one piece of these two transactions un-deleted, your customer will retain an incorrect balance as viewed in the A/R balance on the customer card and reports.
This can be remedied by deleting both transactions. If the payment was already deposited under Prepare Bank Deposit, then you will have to reverse the bank deposit, delete and re-enter the customer payment correctly, then re-do the bank deposit under Banking > Prepare Bank Deposit. The dollar figure of the bank deposit will be identical to the original.