Back charge

Back charge,

Definition of Back charge:

  1. A back charge is a billing made to collect an expense incurred in a previous billing period. It can be due to lack of payment by the recipient of services or goods, an adjustment due to an error, or to collect an expense that was not billable until a later period due to timing issues.

  2. A vendor can, at its discretion, add a late fee or other additional charges in conjunction with a back charge that is due to an unpaid bill.

  3. A billing that is made to collect an expense that is incurred in a previous billing period. This may be an adjustment that is due to an error, or it could be for the purpose of collecting an expense that was not billable until a later period due to issues of timing. When possible, it is best to avoid having to back charge for products or services. Because customers do not expect back charges, they can be confused with billing errors and they often take longer to collect.

Meaning of Back charge & Back charge Definition