In the Nortridge Loan System, all transaction entry functions make use of structured Transaction Codes. These codes define the way any transaction affects the general ledger, the loan balances, the billings, and the payments.
The integrated functionality of transaction code definitions and parameters allows great flexibility in setting up user-defined transactions.
Transaction Codes are configured in Setup > Loan Setup > Transaction Codes.
The parameters that define a transaction code are configured on the various tabs:
General Ledger Controls
General Ledger Controls dictate the Credit and Debit transactions to the General Ledger that are caused by this transaction.
Usually there will be one Credit and one Debit for a single transaction, but there are some rare types of transactions that will prompt postings to multiple accounts.
ExampleUS Farm Equipment Financing Company has a main account for its lending reserves that is defined by the placeholder PHCash Account1. They give credit lines to farmers and the farmers take cash advances for livestock, feed, and equipment. USFEFC sets up a separate manual transaction for each of these kinds of advances. Their accounting department has set up a cash clearing account for livestock, feed, and equipment, and reconciles the amounts loaned for each by looking at the monthly total of debits to each account. These accounts don’t actually hold any balance, but funds must be funneled through them, and the company wishes to process just one transaction, not two. The Credits and Debits for the Livestock Principal Advance Transaction are:
|DEBIT 1||Livestock Clearing Account|
|CREDIT 2||Livestock Clearing Account|
PHCashAccount1, and PHLoanAsset1 are placeholders for accounts that are defined in the loan group. Livestock Clearing Account would be a specific account that USFEFC has set up on their ledger.
The credit and debit fields may be populated with placeholders, or with specific accounts. If populated with a specific account, that account will be credited or debited whenever that transaction is processed. If the field is populated with a placeholder, that placeholder will be matched to a specific account, on the loan group setup, for the loan group, to which the loan, on which the transaction is processed, belongs. That specific account will then be credited or debited by the transaction.
Loan Controls determine which Loan Balances and Statistical Entries are affected by the transaction.
A transaction could be configured to affect up to two Loan Balances, and up to four Statistics (e.g. the Capitalize Interest Transaction will decrease the Interest balance of the loan while it increases the Principal balance).
The loan balances affected may not be modified on default system transactions, although the statistics may. Be careful when modifying the statistics of a default transaction as—if this is not done with great care and consideration—it could result in useless and nonsensical statistics.
Payment Processing Controls
All transactions that represent receivables or payments that satisfy receivables require Payment Processing Controls. These controls tell the loan system if the transaction in question generates a receivable item on the Payments Due tab of the loan query, or if it pays such an item, or if it does neither.
If the transaction is a payment or a receivable, it requires a payment type to be selected: principal, interest, late charge, or fee. All payments and receivables must have an Associated Transaction. The associated transaction for a payment is a receivable, and the associated transaction for a receivable is a payment. To be associated, the payment and receivable must have identical payment types.
The Statement Text field defines a text string to be placed on any report or statement that provides listings of these transactions.
If the Payment History checkbox is selected, all instances of the transaction will be placed on the Loan Payment History tab of a loan query and on the Payment History Reports. All transactions go on the Transaction History tab and on Transaction Register reports.
If a transaction generates a voucher (which will ultimately result in a check being printed from NLS) the setup for that voucher is configured on the Voucher Processing tab.
The Voucher Type Code drop down list is populated from the voucher code setup in the Disbursement setup.
If the force voucher checkbox is selected, then a voucher will be created whenever the trans code is run. If it is not selected, then the voucher checkbox will be present on the transaction entry screen, and the user may choose at that time if they need a voucher to be created.
The Voucher reference box contains data that is to be placed in the reference field of the voucher. This data may be a fixed string of characters, or may be a dynamic variable as listed below, or any combination thereof.
The variables that may be entered in the reference box are as follows:
These options control when and how a transaction code may be used, and may allow the transaction to induce a modification to the loan setup.
|Recalc Payment||The loan setup is modified, with a new payment override, which is derived using the amortizing equations, and based on the current balance, current interest rate, and remaining term. The loan can also be set up to do this automatically upon any rate change, principal advance, or principal reduction.|
|Re-Amortize Loan Payment||The amortization schedule is adjusted to reflect the current balance and rate. The loan can also be set up to do this automatically upon any rate change, principal advance, or principal reduction.|
|Force Amortization Schedule Adjustment||The amortization schedule of the loan will be adjusted when this transaction is run, regardless of the re-amortize settings on the loan.|
|Disallow Amortization Schedule Adjustment||The amortization schedule of the loan will not be adjusted when this transaction is run, even if the transaction is an advance or reduction, and the loan is set up to re-amortize on advances and reductions.|
|Disable use in batch files||This transaction code cannot be accessed through the transaction import procedure.|
|Disable use in manual transaction entry||This transaction code cannot be accessed from the loan account or from the transaction batch entry screen.|
|Disable use in recurring transactions||This transaction code cannot be executed through a recurring transaction.|
|Disable use in late loan events||This transaction code cannot be executed by a late loan event.|
|Disable transaction from further use||This transaction cannot be accessed by any means. It remains on the system in order to have an accurate setup for any transactions of this type, which were executed in the past. Any transaction code that was ever used on an existing loan account cannot be deleted.|
|Enable use in NSF events||Designates the transaction as an NSF fee. The transaction code must be a receivable.|
|Disable flow to shadow loan||If a shadow loan exists and has a setup that designates that all transactions executed on the parent loan should flow through to the shadow loan, this option makes the transaction an exception. Transaction with this trans code will never flow through to shadow loans.|
|Exclude From Amortization Schedule||The transaction will not be shown and considered in the calculations for an amortization schedule report created by NLS. This could cause strange results on that amortization schedule if this checkbox is selected on a transaction code that affects loan balances.|
|Ignore Credit Limit||This transaction code can execute even if in doing so would carry the balance of the loan above its credit limit.|
|Report as charge off to the credit bureaus||This transaction is designated as a charge off for the purpose of credit bureau reporting.|
|Include in Loan Aging||The transaction (generally a receivable) is used to help determine the past due status of the loan.|
|Include in APR Calculation||The transaction will be included in the loan amount for the purpose of determining the APR in the origination module.|
|The transaction will be excluded from the principal balance when a loan is rescinded.|
|The transaction will be included in the scheduled monthly payment amount reported on the Metro 2. Manual fee billings are not included.|
The Notes tab displays the comments entered during the setup of a manual transaction.