Calculating compound interest on past due customer invoice?

Hello PASC,

Thank you for connecting to the QuickBooks Community! For this situation, you would need to manually add this interest as a line item on the older invoices. Regarding getting the compound interest charge, that would also need to be calculated separately. Please use the steps link below to assist with creating a line item.

1. Go to Lists, then select Item List (for Windows) or Items (for Mac).
2. Select Item then New (for Windows) or plus + (for Mac), then select New Item.
3. Select the type of item you want to create.
4. Fill out the item fields.
5. Use Custom Fields to add your own customized fields.
6. Select Save.

Let me know if you have additional questions. I'm more than happy to help. See you soon. 

@PASC 

Don't change older invoices to do this.

Instead, interest can be added to the customer's balance using finance charges (which are really invoices) and the finance charge feature built into QuickBooks.

The finance charge feature includes the option to either charge finance charges on just the original invoices or to include past finance charges in the calculation - which is what you want. The option to calculate finance charges including past finance charges is essentially compound interest - interest charged on the prior interest.

In QuickBooks Accountant Desktop 2024, you'll need to manually calculate compound interest since it doesn't have a built-in feature for it. Use a spreadsheet or an online calculator, applying the interest rate to the overdue balance based on the compounding frequency.