Overdraft Product

Describe this functionality and why an organization would use it (i.e. the business requirements).

On this page:

Beginning at the main screen, select Admin, then Products from the drop-down menu. This will launch the Products menu.

Overdraft should be defined in the Savings product itself by enabling Overdraft allowed as shown in below illustrations.

Select Savings Products.

Create Savings Product

Details

Please refer above Details - Image, Below mentioned Details are updated with respect to the provided fields number's.

1 - Provide Overdraft Product name .

2 - Provide Short name.

3 - Provide Description of this product.

Currency

4 - Select Currency. Need to have defined required currency: Currency Configuration

5 - Provide Decimal places.

6 - Provide Currency in multiples of. This is to provide total amount rounding off. For ex: 10, so Total amount gets rounded of to 10's.

Terms

7 - Provide Nominal annual interest(Rate of interest) - Will calculate the interest on the positive balance.
8 - Select Interest compounding period. For more info refer: Savings Interest Calculation and Posting
Daily
Monthly
Quarterly
Semi-Annual
Annually
9 - Select Interest posting period - Interest get posted for the selected frequency period. For more info refer: Savings Interest Calculation and Posting
Monthly
Quarterly
Semi-Annual
Annually
10 - Select Interest calculated using. For more info refer: Savings Interest Calculation and Posting
Daily Balance
Average daily balance
11 - Select Days in year - depending upon your financial days in a year practice.
365 Days
360 Days

Settings - Enabling overdraft

Skip to 19:

12 to 18 are the other fields which are required for creating - Savings Products, you can ignore and skip to 19.

19: On checking the check box enables Overdraft allowed and opens up new fields: 19-a,19-b and 19-c.
19-a: Maximum Overdraft amount limit - Set overdraft limit amount here, ex: 100000 where in overdraft cant be crossed with this set limit.
19-b: Nominal annual interest for overdraft - Provide annual rate of interest. Will calculate the interest on the negative balance, i.e on the overdraft amount.
19-c: Min Overdraft Required For Interest calculation - Provide in case if you want to provide minimum overdraft required for interest calculation.

Charges

In either to use Add charge, you should have already defined it in charges. For more information on charges refer here: Charges

Accounting

By default Accounting will be disabled - None:- Meaning If you are using this product for various transactions like deposits,withdrawals,etc. these transactions are not passed in journal entry.

Enabling accounting for the savings product:-

>> You should have created chart of accounts, for info refer: https://conflux.atlassian.net/wiki/display/MANUAL/Chart+of+Accounts+-+General+Ledger+Setup.

>> To enable Accounting, you need to select cash accounting. As of now, Finflux supports only cash accounting for savings product.

Cash

>> Map accounts with respect to the savings product accounts. For information on these accounts refer: A Possible accounting Spec - Accounting rules for savings.

Advanced Accounting Rule

On clicking on the show button it enables Advanced accounting rule.

If you click on Add button, it will expand and shows up selection drop-downs.

Configure Fund sources for Payment Channels.
Ex: In the above shown image, Payment type - Cheque is mapped to Fund source - Bank. So whenever payment type is used for transaction. Journal entry for Account - Bank will be passed.
Map Fees to Income Accounts.
Map Penalties to Specific Income Accounts

Click on Submit button to Save/Create savings product.

Finflux User Manual