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 > > >
