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withold amount

wouter_vanhoutte4
Participant
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All,

For our customer we are granting a loan. But a certain fee should be deducted and this should be included in the repayment.

In a simplified example we grant a loan of 10.000 Euro with a yearly repayment of 1000 Euro and a fee of 50 Euro.

The loan is disbursed in several times (e.g. 5000 Euro and 2 months later another 5000 Euro). In this case the 50 Euro should be deducted completely from the 5000 Euro.

What is the easiest way to do it?

- Under condition types, where you can maintain 2 flow types

- under condition type, where you link flow types to an application function

- is it under the flow type, where could indicate that a flow type should be witheld

- is in the offsetting flow type that you should make the link?

Any input is valuable.

Best regards,

Wouter

10 REPLIES 10

former_member357303
Active Participant
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Hi,

should the fee be an own condition ?

Or couldn't you do it with a discount (disbursement rate < 100%) and the option full discount with first disbursement ?

Otherwise you have only to make sure that the 50 exist as planned record (or are created as planned record) with the disbursement then you can choose it as withholding in FNVD. Maybe a question wich capital you use as calculation base.

Kind regards,

Michael

wouter_vanhoutte4
Participant
0 Kudos

I think that a discount should work however if want to disburse it the system doesn't allow me to make a distinction between net and gross amount. Apperantely I oversee something.

0 Kudos

How does the screen with the incidental costs look like ? Is the discount displayed ? And is the withholding indicator set there ?

wouter_vanhoutte4
Participant
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Good morning,

Since this processing fee is applicable to all contracts, I tried to use the witholding indicator so that it would be withheld at the time of disbursement.

It should credit the account "given loan" and put it on a p&l account on the other hand

The main borrower should repay the full amount, so if we deduct from 10.000 euro 20 Euro, the repayment schedule and the mensuality should be based on the 10.000 Euro

Best regards,

Wouter

0 Kudos

Ok, but then it should work with the fee condition.

The fee won't change capital amounts so interest calculation capital is still 10.000.

Kind regards,

Michael

wouter_vanhoutte4
Participant
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Thanks for your input. It helped, I have now 2 solutions : one to post it on the customer account and to post it directly on a G/L account.

0 Kudos

Ok, but withholdings only in connection with customer account postings.

wouter_vanhoutte4
Participant
0 Kudos

Sorry,

I had been in touch with the customer it is still not okay.

The customer wants to put it on a seperate account.

In case we witheld 200 Euro for a loan granted for 10.000 euro the customer wants that the following posting is triggered:

Debit 10.000 Euro Long term debt account

Credit 9800 Euro Customer repayment account

credit guarentee funds 200 Euro.

     => based on your explanation the last one is only possible if you put it on a customer account. It is not possible to put directly on a G/L account => correct?

What i have done (under the assumption that we post on a customer account => condition type 212 payment indicator marked flow type 3145 (as foreseen in standard)

For flow type 3145 the indicator withheld amount put on 2, so I was thinking that it would be deducted at the time of disbursement.

During the processing of FNM1, I see that the general ledger that I specified in FNZA is adressed (debit posting) and also the customer credit posting

Is this standard behaviour?

I'm afraid. I'm still missing something.

Best regards,

0 Kudos

Generally speaking (loan given) there is a customer credit item from disbursement and a customer debit item form incidental cost. Both are cleared and one item remains.

The clearing does only work correctly if only customer accounts are involved (Disbursement: G/L account - customer account, inc. cost: customer account - P&L).

Sometimes customers use the withholding as a kind of transfer and do not post to customer account.

That depends on the business scenario.

If withholding does not work as expected I would recommend to open a message to check it.

Kind regards,

Michael

wouter_vanhoutte4
Participant
0 Kudos

done, thanks for your feedback