When do you guys take your late fees into income? Do you take them in as they are assessed or once they are paid? The President has asked me to check into this to see how other banks are doing it because he is wanting to make a change.

Check with your accountant. There may be state issues

Delinquency fees are recognized when chargeable, provided the collectability is reasonably assured. GAAP is not a State law issue.

Thanks Randy

It is accrual accounting.

I did not know that.
Oddly, I checked our integration and we are accounting on a cash basis. We've never had comments from our accountants about this. I wonder why?

Maybe our CFO knows... I'll speak with him.

It could me inmaterial to them, assuming you are having an audit performed. Are you sure about this, a late notice is generated but does not post to the general ledger until it is collected?

Are you sure about this, a late notice is generated but does not post to the general ledger until it is collected?

You don't have a late charge accrual account - maybe you are on a cash basis on late fees also? It does impact your charge-off process also, as you will have to charge-off accrued late fees if you have already taken the fees into income. There are a lot of reasons things are the way they are, regardless of what you may be allowed to do.

Check with your external accountants, but like it was mentioned, it is probably an immaterial issue so I doubt that they have ever looked at it.