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Financial Institutions may close their accounting books periodically and hence want to know the status of the accrued incomes and expenses as of the particular date.
Today, for Accounting Type as "Accrual (Periodic)", the accrual accounting happens in Mifos on the date a payment is due. This will be enhanced so that the organization can
a) recognize income/expenses periodically for loans (as specified as a configuration):
OR
b) recognize income/expenses as on a particular date for loans (which will be manually specified when invoking the accrual job).
Mifos will continue to accrue income/expense for loans on the dates on which they fall due. There will not be any change to this functionality.
This feature will allow Mifos to cater to standard accounting procedures followed by larger Financial Institutions and move towards making Mifos a more accepted core banking solution.
# | Title | User Story | Importance | Notes |
---|---|---|---|---|
1 | Set accrual accounting frequency | As a head accountant, I wish to specify how frequently accrued income and expenses will be recognized in accounting | Must have | |
2 | Automatic periodic accrual | At the frequency specified by the head accountant, Mifos internally invokes a batch job that will take the current date as input and recognize all unrecognized income and expenses for loans till this date | Must have | |
3 | Manual accrual | As a head accountant, I wish to manually invoke the accrual job as on a specific date to recognize all income and expenses for loans till this date | Must have |
The definition of periodicity of accrual will be applied to the whole Mifos installation (i.e. it is organization wide and not restricted to specific products).
Mifos should support accrual periodicity of the following:
- yearly - on 31st March
- half yearly - on 30th June and 31st Dec
- quarterly - on 31st March, 30th June, 30th Sep and 31st Dec
- monthly - on last day of month
- on 25th of every month
- fortnightly, on second Thursdays
- weekly on Saturdays
- daily
The following attributes will be captured for "Accrual Setup" (under Accounting)
Attribute | Description | Notes |
---|---|---|
Accrual Type | Automatic or Manual | Automatic - means will be invoked automatically on specified periodicity Manual - will be invoked by an accountant or head accountant by manually specify a date and invoking the accrual job This is set for the organization and not for a specific product. Defaulted to Manual. |
Accrual Periodicity | Monthly, weekly, quarterly etc. | Only specified when Accrual Type = Automatic Should support above frequencies |
New permissions to be introduced for:
None
Existing "Add Accrual Transactions" batch job to continue as it is. No changes to this.
A new batch job which will do the following for all active loans:
This new batch job will be invoked at the frequency specified in the "Accrual Setup" (under Accounting)
None
TBD
None
An API to maintain the "Accrual Setup" attributes
An API to invoke the periodic accrual batch job as on a specified date
Accrual Type to be defaulted to "Manual" during upgrades
Column Name | Data Type | Description |
---|---|---|
accrued_till | Date | to identify till which date accruals are done |
Below is a list of questions to be addressed as a result of this requirements document:
Question | Outcome |
---|---|
Confirm that the handling of backdated transactions as described above is accurate from an accounting perspective | TBD |