The transaction type is entered in the Transaction Entry screen with the Transaction Type drop down list. The following is the list of available transaction types.
The standard Payment transaction is designed to use the appropriate transaction codes that will satisfy the billed receivables according to the loan’s payment application defaults.
This payment will often result in the employment of multiple transactions that use separate transaction codes.
ExampleIf the loan has a payment due that includes $400 of principal, $100 of interest, and a $25 fee, and if a payment of $525 is entered, the standard payment will break the $525 down and apply three separate transactions for principal, interest, and fee payments.
The Principal Reduction transaction is a payment that is outside the normal schedule of payments. It does not satisfy any billed receivables, but it does reduce the principal balance of the loan. If the loan uses a fixed amortized payment and the loan’s re-amortize options are set to re-amortize the loan on principal reductions, this principal reduction will cause the interest accrued, according to the amortization schedule, to be adjusted based on the lower principal value of the loan. This will result in the interest to principal ratio of all subsequent payments to be recalculated. The payment amount remains fixed, so the loan will pay off early, unless the re-amortize options of the loan are also set to re-amortize the payment on principal reductions. In this case, the payment amount will be recalculated.
Since this transaction always affects principal, there will be no distribution screen.
The Interest Reduction transaction is an interest only payment that is outside the regular payment sequence and does not satisfy any interest billing receivables.
Since the transaction always affects interest, there will be no distribution screen.
The Advance Principal transaction is used for the recording of disbursements of funds to the customer, subsequent to the origination of the loan.
On an amortized loan, this transaction will result in both a recalculation of the payment amount, and the amortization schedule, if those options are selected in the re-amortize options of the loan’s setup.
For the transaction, you can use the Payment Method field to record the mode of the disbursement.
The Reverse Payment transaction is used to roll back payments that have been made in error.
When Reverse Payment is selected from the Transaction Type drop down list, a list of payments for the loan will be displayed. To reverse any one of them, select that payment’s Reverse checkbox.
When a payment is reversed, it is removed from the loan payment history. It remains in the loan transaction history, and a reversing entry, or entries, is added as well.
If a payment is reversed after the payment’s grace period is over, a late fee will be automatically assessed if the loan is set up for a late fee.
If a payment is reversed, and that payment is not the last payment, all subsequent payments will automatically be reversed and re-assessed so that they will be applied as if the reversed payment had never been entered.
The NSF Payment transaction is used to reverse a payment where the check came back due to insufficient funds. It differs from a regular reversal in the following ways:
- When a regular payment is reversed, it is removed from payment history, but an NSF payment remains in payment history along with its reversal.
- An NSF fee is automatically assessed against the loan according to the setup defined under the NSF code that is set on the loan.
- One is added to the NSF counter in loan statistics.
When you select NSF Payment as your transaction type, you will get a list of the payments eligible to be reversed. Select the payment that needs to be reversed due to non-sufficient funds. Information about the NSF fee to be added appears at the bottom of the window. The amount field is automatically filled in according to the setup of the NSF code, but this amount may be modified at this time.
The Adjust Interest transaction is used to make adjustments directly to the balance of the accrued interest. The transaction is posted to the interest accruals record, along with the daily interest accruals, instead of being posted to transaction history.
If the adjustment is to reduce the interest balance, use a negative number for the amount.
If you are making your adjustment to the deferred interest balance of the loan, enter the positive or negative adjustment amount in the adjustment field next to Deferred Interest Accrued.
The Manual Transaction is used to directly activate any transaction code on NLS, including transaction codes that were user-defined.
After selecting Manual Transaction, select the specific transaction code from the Transcode drop down list.
The functionality of the manual transaction code is dependent on the configuration of that transaction code. For more information on setting up transaction codes, see Transaction Code Setup.
Reverse Manual Transaction
Every standard transaction configured in NLS has an even-numbered transaction code. Each transaction has a specific transaction code that is designated as its reverse. This transaction is designated by an odd numbered trans code that is exactly one number higher than the transaction that it reverses.
To activate the odd numbered transaction codes, select Reverse Manual Transaction from the transaction type drop down list.
Select the type of transaction from the Transcode drop down list. A list of transactions of the appropriate type to be reversed is displayed.
Click on the transaction that you wish to reverse so that it is highlighted then click OK.
NLS 4.10.9 and later
Note that voiding a transaction without having voided the check created by the voucher will result in the voucher left in a pending state with no means to cancel the voucher as the transaction associated with the voucher has already been reversed.
The Refund Check transaction is used for resolving funds in the suspense account, and does so by generating a voucher. This voucher can later be used to print a check.
After selecting Refund Check from the Transaction Type drop down list, you must select a vendor account for the payee of the refund. The refund transaction will reduce the suspense balance of the loan, allowing the loan to be closed if desired. In addition, if you have configured the loan system for check printing, you will have a voucher to process.