Configure Lending Management

Subscription Lending Management
Regional availability United States
User type Business user with admin privileges
Permissions Application subscriptions: List, View, Configure
  1. Go to Lending Management > Setup > Configuration.
  2. Select Edit.
  3. Enter information and select options.

    Be sure to enter information in fields in the following sections, which are required:

    • Journals
    • GL accounts
    • Interest, invoice, and statement generation settings
  4. Select Save.
Most settings for Lending Management can be set only at the top level. If a setting can be set at the entity level, this is noted in the following sections.

Journals and GL accounts

Use the fields in these sections to specify journals and offsetting GL accounts for loan transactions.

Some loan transactions are posted through other applications, so you do not configure journals or GL accounts for these transactions in Lending Management.

For transactions that are posted through Accounts Payable or Cash Management, the posting process uses all related settings from those applications. This includes settings for thresholds, and for reversing and deleting transactions.

Journals and GL accounts field descriptions
Section Description

Journals

Specify the journals to be used for automatically recording the following loan transactions:

  • Write-offs
  • Adjustments (except ones that have an adjustment type of Adjust principal)
  • Loan fees

GL accounts

Specify the General Ledger accounts to be used for posting loan transactions directly from Lending Management:

  • Loans receivable
  • Interest on loans receivable
  • Allowance for loan loss: principal
  • Allowance for loan loss: interest
  • Loan fees receivable
  • Interest income
For all loan transactions, the summary frequency to GL is one per transaction. Every transaction that you post from Lending Management has a corresponding transaction in the general ledger.

Banking

Banking field descriptions
Field Description

Default bank account

You can enter a default bank account for loans, or you can leave this field blank to use the default bank account specified in Cash Management.

The default bank account can be set at either the top level or the entity level. At the top level, you can enter any top level bank account. At the entity level, you can enter a bank account only if it is assigned to the entity.

Enable functionality

Enable functionality field descriptions
Field Description

Enable negative interest balances

Select this option to allow loans to have negative interest balances.

Interest, invoice, and statement generation settings

Interest, invoice, and statement generation settings field descriptions
Field Description

Method

When you initially set up Lending Management, you specify how periods are determined for interest, invoices, and statements. You set this at the top level and it applies to all entities. You cannot change this setting after it is set.

  • Standard: Periods for a loan are based on the following:
    • The invoice frequency and statement frequency, which are set in the loan type used for the loan.
    • The first invoice date and first statement date for the loan.

    Example:

    A loan uses a loan type where both the invoice frequency and the statement frequency are monthly. The first invoice date and first statement date for the loan are both August 9. For this loan, the first period for interest, invoices, and statements is July 10-August 9.

  • Month-end: Periods are calendar months, and payments are due on the first of the month. If a loan's origination date is mid-month, amounts for the first period are prorated.

First statement date

If you use the Month-end method, enter the date that interest, invoices, and statements will first be generated. This date can be changed any time before you first generate interest, invoices, and statements.