Setup of an Annualised Interest - Repayable Account

Setup of an Annualised Interest - Repayable Account

Purpose

To allow the setup of a Annualised Interest Repayable Account. 
  1. Annualised interest amount is due to be paid weekly, fortnightly or monthly etc
  2. The Principal Loan amount is due for repayment on the last Interest Repayment Date
  3. The Interest is calculated for the year and divided up equally per the frequency number
For Example: 
  1. $1,000,000 Loan paid at 7% interest,
  2. 12 Month Loan
  3. Total interest payable on the loan is $70,000
  4. 12 even monthly Interest Payments of $5,833.33 
  5. Total Loan amount is due to be paid with the last Interest Payment

Initial Setup Required

Account Transaction Type

An Account Transaction Type will need to be setup
  1. Accounts | Edit/View Account Transaction Types | 


Note: The code and description (which may appear on the customer statement) should be modified to suit your business requirements.

Ensure that the GL code selected is the correct code for your business.

The Ledger MUST be Future Ledger.


Loan Setup Required

Instalments

Complete the loan dialog with any missing information when the quote is turned into an account. The following MUST be entered for the Instalment Setup to allow for the payments to be collected:

Field
Explanation
Next Instalment
Enter the Start Date for the Interest Payments
Instalment Frequency
Enter the Posting frequency for the payments to be made on the account
Instalment Day
Enter the Day number if the frequency is set to monthly, otherwise leave blank
Instalment Amount
Enter the amount of interest to be paid each frequency as per the schedule 
Interest Only %
MUST be set to 0

Interest Dialog

The Interest dialog on the Account MUST be set up as below:

Field
Explanation
Next Interest Date

There are two options:

  1. Enter a date that is one year out from the loan open date.  Any adjusting transaction will be dealt with on the anniversary of the loan account opening.

  2. Enter the financial year end date.  Using this date will ensure there is no accrued interest on the loan at year end. 
Frequency
Must be set to Yearly
Day

This should be the day used by the next interest date

E.g. If the next interest date is the 15/09/2025, then this day would be set to 15

Where the last day of the month is the next interest date, then this day must be set to 31
Interest Action
Must be set to Transfer Account
Transfer Account

Must be set to the same account (this will transfer the small amount of accrued interest (if any) to the current ledger, allowing any small balance to be written off)

This would be an annual process

Recurring Charge

The Recurring dialog on the Account MUST be set up as below to allow for the posting of the amount to be paid weekly, fortnightly or monthly etc

Field
Explanation
Code
Enter the Code that you want to appear on the Transaction dialog as the Reference
Description
Enter the Description that you want to appear on the Transaction dialog as the Description
Frequency
Enter the Posting frequency for the payments to be made on the account

This will be the same as the instalment frequency
Day
Enter the Day number if the frequency is set to monthly, otherwise leave blank

This will be the same as the instalment frequency day
Remaining
Enter the number of payments due on the account as per the schedule
Start Date
Enter the Start Date for the Interest Payments

This will be the same as the instalment frequency date
End Date
Enter the End Date for the Interest Payments
From Transaction Type
Select the Transaction Type set up above for the Interest Payments
Amount
Enter the amount of interest to be paid each frequency as per the schedule 




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