Invoicing monthly installment payments

[bobbanta]

We sell our product using installment sales. For example, we will sell a product for $500, and bill our customers $50 per month plus interest at 9.8%.

I have already figured out how Peachtree will calculate the interest charges, but how do I set up recurring monthly "invoices" for the monthly payment that is due? I can't simply invoice someone for $50 because it would increase the amount receivable from $500 to $550. I need to be able to "invoice" them $50 per month without increasing the underlying receivable balance?

Any ideas? Thanks.

[riscniaga]

hope this helps.

there are three steps to this.

firstly in your invoice, put in the following entries - example:

item a 200.00
item b 300.00

secondly, create a credit note invoice for the following

financing: 12 mth instalment plan -500.00


thirdly, create recurring invoices to bill them 50.00 per month over 12 months - part is for principal and part is for the finance charge.

you will need to create gl account code for the instalment plan - a balance sheet item.

i used to work at arthur andersen - so you may want to get a second opinion on the tip above.

ha... ha.... just a small joke i share with prospects and clients of mine.

[bobbanta]

Thanks for the input. I'll give this a try, but I wonder if creating an invoice and then immediately creating a credit will negate the automatic calculation of interest that I need.

Nevertheless, I appreciate your help.

[TWB]

What I don't understand is how you are getting p'tree to caculate anything? could you enlighten me on this feature? I have numerous areas including note payable and receivable that I'd like to caculate.

[bobbanta]

I'm using the finance charge function in A/R. In the defaults, I set up the interest rate I'm using (9.8%) and then say that all of my sales are "late" after 0 days. This tells the system that my invoices are in a "net due" status, which means they will begin accruing interest the day after the invoice date. When payments are posted, interest accrues on the new balance outstanding.

[TWB]

Very neat, thanks for the idea!