Walkthrough: Loan pay back with minimum pay back
A scenario similar as the Walkthrough Loan pay back by periodic discount credit memo, but with a minimum pay back agreement. When less is paid back from the periodic discount than scheduled, a loan pay back journal line will be posted for the difference to collect by regular payment.
Step 1: Register the loan
Search for Loans and click New to create a loan. Alternatively, you can create a new loan from a customer or vendor card, on the Contract Management FastTab, by drilling down on the No. of Loans field.
On the loan card select a Loan category code setup with
- Capitalized Pay Back = Yes
- Scheduled Pay Back type = Balance
- Pay Back Period type: select here the period for the Create Loan Pay Back Journal lines action. The period by which the customer will receive a periodic discount settlement credit memo can be different (that is determined in the SPC rule by the Calculation code).
With this, the Create Loan Pay Back Journal line function will calculate the amount from Scheduled Balance (Cap) (LCY) versus the actual Loan Balance (Cap.) (LCY) (after having created and posted the periodic settlement credit memo)
Fill the ‘budgeted’ pay back amount in field Scheduled Pay Back Amount (LCY) (manually or by the Calculate the Scheduled Pay Back Amount action).
Select Create Loan lines action. It shows the Scheduled Capital Balance (LCY) per date.
Complete other fields for dates, contract and object and set the status to the one that allows for next actions.
Step 2: Pay out the loan
Post the Loan pay out through a general journal, like the cash receipt journal or a bank journal. Select the Customer, the Loan No. and set the Loan entry Type to Loan Pay Out, it will update the (Customer) Posting Group accordingly and set the due date to the end date of the loan. Fill in the loan amount and select a balancing account. Post the Journal.
Step 3: Pay back the loan by credit memo
Sales Credit memos will probably be created from the Aptean Beverage Sales and Purchase Condition Settlement journal, but you can create them also manually and link them to the loan for pay back.
Search for Sales Credit Memos, click New and select the customer of the loan. Create lines.
On FastTab Contract Management select the loan in field Loan No. and set Loan Entry Type to Pay Back (Cap).
On FastTab General you can apply the credit memo to the open loan pay out entry in field Applies-to Doc. No., or do that afterwards, from the customer ledger entries.
Post the credit memo.
Step 4: Pay back the loan by journal
Open the Loan card. The balance of the loan is changed by the credit memo and shows in field Balance Loan (cap.) (LCY) on the Balance Fact Box and in the loan lines. The loan lines show the Scheduled Capital Balance (LCY).
Run the Create Loan Pay Back journal lines action from the loan card (with default filter on the loan no.), or in general for all applicable loans (search for this function) to create an open due entry. Select an As per Date and Posting Date.
The function only takes valid loans into consideration
- Status: allows for pay back
- Scheduled Pay back Type: unequal None
For loans with Scheduled Pay Back type = Balance, when the Scheduled Capital Balance (LCY) of the last Loan line on or before the As per Date is lower than the Balance Loan (cap.) (LCY) it will create journal lines for that loan line when the Pay Back Status = New. After that the Pay Back Status of the Loan line is set to Progress.
When the Scheduled Capital Balance (LCY) of the last Loan line on or before the As per Date is equal or higher than the Balance Loan (cap.) (LCY) it will skip the loan.
When lower, it will create 2 journal lines, for customer loans a debit and a credit line where the credit line gets the end date of the loan as due date and the debit line gets the due date from the journal line’s document date (from posting date) + the payment terms date formula of the loan. Both lines have the same loan no., loan entry type and thus the same posting group.
The credit journal line is applied to the oldest loan pay out entry. The debit journal line will post the open entry that is supposed to be collected (direct debit, apply a bank transfer to this entry, remind it when overdue...).
For vendor loans it is the opposite, the debit line is applied to the loan and the credit line is due, to be paid.
Post the journal.
This will update the Pay back Status of the loan line to Posted.
Open the Loan card. The balance of the loan is not changed, but it has an open entry ]to be collected with the payment method from the loan card on the due date from the loan line and payment terms. Drill down on the Balance Loan (cap.) (LCY) field to view the open entries.
When actual payment is done (direct debit, cash, bank transfer) from the customer, you post that in your cash/bank/payments book. When you select the open entry in field Applies-to Doc. No. fields Loan, Loan Entry type and Posting Group are updated from that and cannot be changed. When you apply by the Apply Entries action the journal line will be updated from there, possibly even split when multiple entries were applied with different posting groups, loans or loan entry types.
Post the payment of this minimum pay back difference.
The Loan Balance (Cap) (LCY) has been updated in both the Balance Fact Box and in the Loan lines.