Introduction
In Empress, the Loan feature is a powerful tool that allows you to create and manage loan records and repayment schedules easily. This feature is particularly useful for business users in managing employees’ loans and ensuring smooth financial operations.
Let’s dive in to learn how to use this feature to streamline your loan management processes.
Before You Start
Before creating a loan record, you need the following:
- Loan Type
- Loan Application
- Chart of Accounts
These documents will provide the necessary information for creating a loan record.
Creating a Loan Record
Here are the steps to create a new loan record:
- Go to Loan > New.
- Select the name of the loan applicant.
- Choose the relevant Loan Application. The loan details such as Loan Type, Loan Amount, Rate of Interest, Repayment Method, Repayment Period, and Monthly Repayment Amount will automatically be filled in.
- Enter the Repayment Start Date.
- Provide necessary Account Information like Mode of Payment, Payment Account, Loan Account, and Interest Income Account.
- Save the record. Once saved, a Repayment Schedule is automatically generated based on the Repayment Start Date.
Note: If you want the loan repayment to be deducted directly from the salary, check the “Repay from Salary” option.
You can also create a loan record directly from the Loan Application.
Using the Loan Feature
Creating a Disbursement Entry
Once you’ve submitted the Loan document and the loan status is “Sanctioned”, you have the option to “Create Disbursement Entry”. This action will generate a Journal Entry for the Loan.
Deducting Loan Repayment from Salary
If you want the Loan repayment to be automatically deducted from the Salary, make sure to check the “Repay from Salary” option in the Loan document. The Loan Repayment will then appear in the Salary Slip.
Extending the Loan
In case an employee is on leave without pay for a certain period, you can extend the existing loan instead of creating a new one. To do this, simply edit the Repayment Schedule table, even after the loan has been submitted.
Summary
The Loan feature in Empress simplifies the process of managing loans, making it straightforward and efficient. By allowing automatic generation of repayment schedules and enabling direct deduction from salaries, it ensures seamless loan processing and repayment scheduling. For further help, consider reaching out to the Empress support team or exploring additional resources.