Hi, I have created the jira ticket for the same https://issues.apache.org/jira/browse/FINERACT-1935
Thanks, Nazeer SSA, CrediLinq https://www.credilinq.ai On Thu, Jun 1, 2023 at 3:47 PM Nazeer Hussain Shaik < nazeerhussain.sh...@gmail.com> wrote: > Hi Bharath, > > Thank you. I will create a Jira ticket so that community members can > update the requirements there. > > 1. Cash-based > For this, we can directly post the entry to income from interest GL Account > Nazeer -> The problem is the upfront interest amount can't be > posted directory to GL Account as I am not sure marking future installments > interest paid is a good idea (at least with periodic accruals). So I am > thinking of keeping the upfront interest on Liability GL account and keep > on adding interest paid transaction(s) before installment due. I assume > this works for 3 accounting scenarios. I haven't thought about interest > recalculation config so far. > > 2. Accrual (Upfront) > For this type > We need to have a receivable account credited first and then would be > moved to the Income GL account when the payment comes in > Nazeer -> Same as above > > 3. Accrual (periodic) > Since on the business side, the Income amount is being collected upfront I > do not think it is correct to have interest accruals at the installment or > at a periodic cut-off. > but the system should accrue if any fees or penalties are introduced in > the middle of the loan term. > Nazeer -> Same as above > > On Thu, Jun 1, 2023 at 12:22 PM Bharath Gowda <bgo...@mifos.org> wrote: > >> Hi Nazeer, >> >> Good to hear from you and happy to see this feature being worked on. >> Has a Fineract JIRA been created yet for the same? it will be helpful if >> you could share the JIRA ticket with the flushed-out functional and >> implementation details. >> Curious to know more about what type of product configurations this would >> be allowed and not allowed. as it would become more complex with daily >> interest calculations and recalculations enabled. >> >> Here are my 2 cents on the accounting entry for the same >> >> 1. Cash-based >> For this, we can directly post the entry to income from interest GL >> Account >> >> 2. Accrual (Upfront) >> For this type >> We need to have a receivable account credited first and then would be >> moved to the Income GL account when the payment comes in >> >> 3. Accrual (periodic) >> Since on the business side, the Income amount is being collected upfront >> I do not think it is correct to have interest accruals at the installment >> or at a periodic cut-off. >> but the system should accrue if any fees or penalties are introduced in >> the middle of the loan term. >> >> Anyone with experience in upfront interest loan products with >> accrual-based accounting, feel free to correct me and share your thoughts >> on the same. >> >> >> >> Regards, >> Bharath >> Lead Implementation Analyst | Mifos Initiative >> Skype: live:cbharath4| Mobile: +91.7019635592 >> http://mifos.org <http://facebook.com/mifos> >> <http://www.twitter.com/mifos> >> >> >> >> On Thu, Jun 1, 2023 at 12:03 AM Nazeer Hussain Shaik < >> nazeerhussain.sh...@gmail.com> wrote: >> >>> Hi all, >>> >>> Hope this email finds you well. We are planning to implement upfront >>> interest collection for the loans for some of our business use cases. With >>> respect to the following 3 accounting configurations, how to post the >>> journal entries ? >>> >>> >>> >>> 1. Cash Based >>> 2. Accrual (Up front) >>> 3. Accrual (Periodic) >>> >>> >>> Can we directly post the entry to income from interest GL Account? Or do >>> we need to have some kind of liability GL account where upfront collected >>> interest will be posted on this account initially and then moved to income >>> from the interest account? >>> >>> And how the Periodic accrual entries should be posted (As periodic >>> accrual entries will be accrued and posted per instalment)? >>> >>> >>> Thanks, >>> >>> Nazeer >>> >>> SSA, CrediLinq >>> >>> https://www.credilinq.ai >>> >>> >>>
