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Table of Contents (Online Help)

LPF Automatic Transactions

How automatic bookings are made?

To add/modify a transaction you go to Accounts/GL Transactions/Add and Modify Transactions. A screen that looks like one below appears:

Note that
1. Loan Performer does automatic bookings of transactions and such transactions will not be modifiable (though you can change the account-numbers and the account labels).

2. The automatic bookings will be activated after entering the starting date for the financial year at System/Configuration/Accounting. Once activated it cannot be de-activated anymore.

3. You can enter the beginning of financial year date only once. After that this field will become read only and automatically updated with every year closure. If you have not entered this date no Savings, loans and P&L transactions will be booked to the General Ledger

Using an example of a loan to Oyebolu Bamidele with payment of fees and commission as seen below:

The automatic bookings are made as follows:

Payment of Development fees, Loan Commission and Stationery:

Cash (never by cheque)	Debit
Development Fees 7,500		Credit
Loan Commission 12,500		Credit
Sale of Stationery 15,000		Credit

• Interest being an income in the subsequent month when the loan is paid, it will also be automatically posted into the income account as seen below

Payment of membership fee for a new client

Cash	Debit
Registration fees		Credit
Sale of Stationery		Credit
Administration fees		Credit

Entering a deposit

Cash/Suspense Account Cheques	Debit
Savings Ind/Grps/Businesses		Credit
Sale of Stationery Credit		Credit
Cheque Commission		Credit

Entering a withdrawal (a withdrawal never takes place by cheque)

Savings Ind/Grps/Businesses	Debit
Cash		Credit
Penalty fees		Credit
Sale of stationery		Credit

Cheque clearing of a savings deposits

Bank Account Savings	Debit
Suspense Account Cheques		Credit

Interest on Savings

Interest on Savings Ind/Grp/Buss Accounts	Debit
Savings Ind/Grp/Buss		Credit

Disbursing a loan

Principal Outstanding Ind/Grps	Debit
Cash/Suspense Account Cheques/Savings Ind/Grp		Credit

Disbursing a loan to supplier

Principal outstanding Ind/Grps Supplier	Debit Debit
Stock account Cash/Suspense Account Cheques/Bank.		Credit Credit

Loan repayments

Cash/Suspense Account Cheques/Bank Debit	Debit
Principal Outstanding Ind/Grps		Credit
Interest Earned on Ind/Grp Loans		Credit
Penalty Fees		Credit
Sale of Stationery		Credit
Cheque Commission		Credit

In case of a savings transfer to repay the loan

Savings Ind/Grp	Debit
Principal Outstanding Ind/Grps		Credit
Interest Earned on Ind/Grp Loans		Credit
Penalty Fees		Credit
Sale of Stationery		Credit

Entry of a bounced cheque for a loan repayment:

Principal Outstanding Ind/Grps	Debit
Interest Earned on Ind/Grp Loans	Debit
Penalty Fees	Debit
Sale of Stationery	Debit
Cheque Commission	Debit
Suspense Account Cheques		Credit

Entry of bounced cheque commission (note that the commission for the bounced cheque is taken from the client’s savings account).

Savings Ind/Grp	Debit
Cheque Commission		Credit

Penalties for defaulters:

For the charging of penalties for defaulters no booking takes place. In the loan administration the penalty is automatically charged to the client. But just like interest charged, penalties are booked when actually received. But, if you want to, you can update the GL with the penalties charged using the module for Accrued Interest.

Cheque clearing of a loan repayment

Bank Account Savings	Debit
Suspense Account Cheques		Credit

Creation of the provision

Provision Costs Bad Loans Ind/Grps	Debit
Provision for Bad Loans Ind/Grps (Balance)		Credit

Note that for the interest (and the penalties), there is no provision as it is booked when received. Note also that the creation of the provision does not reduce the loan revolving fund. It is taken as an expense that will reduce the annual profit.

Writing off loans

Provision for Bad Loans Ind/Grps (Balance)	Debit
Loans Written Off Ind/Grps (Balance)		Credit

Repayment of a written off loan

Cash/Suspense Account Cheque	Debit
Recovery of Written Off Loans (P&L)		Credit
Cheque Commission		Credit

The Trial Balance now shows the loans written off as follows:
    Loans Outstanding (Balance A/C)                      Debit (this includes written off loans)
    Loans Written Off  (Balance A/C)                      Debit (negative)

At year closure, user is asked to offset balance on the “Loans Written Off account and to enter manually the following transaction:
   Loans Written Off  (Balance)                     Debit
   Loans Outstanding  (Balance)                              Credit

Deposits to the Loan Revolving Fund

Bank/Cash/Suspense Account Cheques	Debit
Loan Revolving Fund		Credit

Withdrawals from the Loan Revolving Fund

Loan Revolving Fund	Debit
Bank/Cash		Credit

Related Topics

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