Backdated Payments for IPT-Enabled Simple Loans

Overview

When a backdated payment is made prior to an Interest Posting Transaction (IPT), the IPT gets reversed, and a new backdated payment transaction is created. 

Create a Backdated Payment

Prerequisites

The following are the prerequisites to create a backdated payment for an IPT-enabled simple loan:

• The loan is approved and funded.

• The Is Interest Posting Transaction Enabled checkbox is selected.

Steps

Perform the following steps to create a backdated payment for an IPT-enabled simple loan:

1. Log in to your Salesforce account.

2. Click CL Contracts.

3. Select the required CL Contract ID.

4. On the Transactions tab, click Payments.

5. Click New Loan Payment Transaction.

6. In the Payment Transaction section, specify the details as described in the following table:

   Field Name	Purpose and Action
   Spread Manually	To manually allocate the payment amount to the various spread components, select this checkbox.
   Write off Recovery Payment	To recover the payment against a written-off loan, select this checkbox. Note: For a written-off loan, the payment is used to satisfy only the outstanding principal and not the fee or the interest components.
   Transaction Date	The creation date for the backdated payments.
   Payment Application Mode	For payment application mode, select Future Dues or Current Dues from the list. This is the mode in which any excess payment by the borrower is applied to the outstanding dues. This can be future dues, where the excess amount is used to settle the future bills or current dues, where the excess amount does not impact payment of future bills in any way. In both cases, the outstanding principal is reduced by the excess amount. Note: This field is not applicable for LOC loans. Note: For more information on payment application mode, refer to the Payments section.

7. In the Spread section, specify the details as described in the following table:

   Field Name	Purpose and Action
   Payment Mode	To select the payment mode, search for the required mode and click it.This is the mode in which the payment amount is received from the borrower. Note: You can configure payment modes as per your business requirements, such as cash, check, or ACH. The payment mode selected here becomes the default mode for the contract. If nothing is selected in the contract, then the default payment mode is Cash. Note: This field is used by the ACH Processing Job to create the processing files for different payment modes.
   Reference	If a check number or a transaction reference is required for the backdated payment transaction, then specify that reference here.
   Principal	Specify the principal amount collected for the loan.
   Interest	Specify the interest collected for the loan.
   Fees	Specify the fee collected for the loan.
   Transaction Amount	Specify the total amount for which the backdated payment is created. In the case of manual spread, this amount is calculated by the system based on the values of the spread components such as principal, interest, and fee. For example: If Principal = 500 Interest = 50 Fees = 50 then Transaction amount = 500 + 50 + 50 = 600
   Loan Payment Spread	To use the default or custom payment spread, search for the loan payment spread and select it.

8. In the ACH section, specify the details as described in the following table:

   Field Name	Purpose and Action
   Sent to ACH	When the transaction is picked up during the ACH processing job, this checkbox is automatically selected.
   Sent to ACH On	This is the date on which the transaction is sent for ACH Processing. It is automatically updated by the system.
   ACH Filename	This is the name of the ACH file in which the transaction is included. It is automatically updated by the system.
   Cleared	Once the transaction is successfully processed and the funds are credited, this checkbox is automatically selected.
   Reversed	If the transaction is reversed, this checkbox gets automatically selected.
   Excess	This is the excess amount paid. It is automatically updated by the system. For example, if the repayment amount is 1000, but the borrower pays 1200, then, 200 becomes the excess amount.

9. To validate the transaction amount, click Validate.

10. Click Save. 

Results

Following are the results of making a backdated payment:

• IPT is reversed.

• Last Accrual Date (LAD) changes to the new backdated payment date.

Scenarios

Following are the scenarios when a backdated payment cannot be made:

• When there is a payment already made after the intended backdated payment date.

• When there is a disbursal done after the intended backdated payment date.

• When there are Other Loan Transactions after the intended backdated payment date. The Other Loan Transactions can be of the following types:

  • Change due day

  • Loan rate change

  • Principal adjustment

  • Reschedule

IPT Reposting

After the new backdated payment date, the IPTs are reposted under one of the following scenarios:

• When the Interest Posting job is run manually

• When the Interest Posting job is run as part of the SOD job chaining

Example

Say, a contract, LAI-00011501, is created with the following conditions:

• Creation date: March 1

• Interest Posting Frequency: Monthly

• Backdated payment date: April 20

• The date on which the backdated payment is made: May 20

The following table explains the flow of events for this scenario:

The following images explain this scenario:

Image 1: IPT2 created on May 1

Image 2: IPT2 reversed when backdated payment made on April 20

Image 3: LAD changes when backdated payment is made on April 20

Image 4: Error thrown when trying to do a backdated payment on April 15 after which there is already a payment transaction done

Image 5: IPT 3 created when Interest Posting job is run as part of the SOD job when system date changes to May 21

Image 6: IPT 3 showing the transaction time it was created on

Image 7: Last Accrual Date now changes to May 1