Ledger accounts represent an Individual account within an Organizations Chart Of Accounts(COA) and are assigned a name and unique number by which they can be identified.
All transactions relating to a company's assets, liabilities, owners' equity, revenue and expenses are recorded against these accounts
An accounting closure indicates that no more journal entries may be logged (or reversed) in the system, either manually or via the portfolio with an entry date prior to the defined closure date
A journal entry refers to the logging of transactions against general ledger accounts. A journal entry may consist of several line items, each of which is either a "debit" or a "credit". The total amount of the debits must equal the total amount of the credits or the journal entry is said to be "unbalanced"
A journal entry directly changes the account balances on the general ledger
It is typical scenario in MFI's that non accountants pass journal entries on a regular basis. For Ex: A branch office might deposit their entire cash at hand to their Bank account at the end of a working day. The branch office users might not understand enough of accounting to figure out which account needs to get credited and which account needs to be debited to represent this transaction.
Enter accounting rules, an abstraction on top of manual Journal entires for enabling simpler data entry. An accounting rule can define any of the following abstractions –
- A Simple journal entry where both the credit and debit account have been preselected
- A Simple journal entry where either credit or debit accounts have been limited to a pre-selected list of accounts (Ex: Debit account should be one of "Bank of America" of "JP Morgan" and credit account should be "Cash")
- A Compound journal entry where multiple debits and / or multiple credits may be made amongst a set of preselected list of accounts (Ex: Credit account should be either "Bank Of America" or "Cash" and debit account can be "Employee Salary" and/or "Miscellenous Expenses")
An accounting rule can also be optionally associated with a branch, so that only a particular Branch's users have access to the rule
Organization Level Financial Activities like Asset and Liability Transfer can be mapped to GL Account. Integrated accounting takes these accounts into consideration when an Account transfer is made between a savings to loan/savings account and vice-versa
Periodic Accrual is to accrue the loan income till the specific date or till batch job scheduled time.
This defines the Provisioning Entries for all active loan products