Staff Loan Subsystem {FARO-8 }

This option, “MAINTAIN STAFF DEBTORS”, leads to menu {FARS} which allows: the creation and maintenance of Staff Debtors and Staff Loans: interest calculations: the automatic generation of transactions for the Payroll System: the automatic crediting of loan repayments to the debtors account.

Before the subsystem can be used, the following should be done (assuming that GLAs already exist for Debtors Control, Salary Loan Suspense and Interest Revenue):

in view of reporting considerations, it is advisable to create a debtor type for staff in option {FARC-1};
the required loan types are then created in option {FARS-1}.

In order to register a staff member for a staff loan, the following steps are required:

a debtor's record is created for the staff member in option {FARO-21};
for a new loan, the debtor can now be issued with a cheque from CT, thus creating a debit on the debtors transaction file; if an existing loan is being taken on, the reducing principal must be journalised to the debtor's account via option {FARO-1} (as explained in Section 2.2 of this manual). A TT must first be created for this purpose with debit GLA = the staff debtors control as per {FARS-1} and credit GLA = a fund balance account.
next, the debtor code is linked to the staff number in option {FARS-2b1};
loan details are subsequently supplied for the debtor in {FARS-2b2}, multiple loans being allowed per debtor.

Important note: In principal, deductions from a staff member who is also a debtor can be dealt with in one of two ways, namely:

Credit the deduction from the PRS directly to Debtors Control: after the deduction is copied to the debtor, insert a credit to the debtor and ANY transaction into the GL-transaction file with the date in the “Post to GL-indicator” set to system date. This option does not offer any control over transactions deducted and not yet copied and the specification of GLA’s on the transaction types (TT) can be confusing.
Alternatively, the system automatically posts all loan deductions in the PRS to a Salary Loan Suspense account. The copy of these transactions to AR then debits the Salary Loan Suspense account and credits the Debtors Control account. ITS has adopted this method, which offers the control on deductions made in PR and NOT yet copied to AR; it eliminates all possible confusion in the specification of the GLA’s on the transaction types.

Loan Repayments Via Counter System

It could happen that a staff member acquires outside funds and wishes to accelerate the redemption of a loan. In this case the payment is recorded via the Counter system {FCTO-3}, but it is essential that the loan code of the loan against which the debtor wishes to deposit money be recorded on the CT transaction.

Processing Rules
	No special processing rules.

Date	System Version	By Whom	Job	Description
29-May-2008	v01.0.0.0	Charlene van der Schyff	t145484	New manual format.
30-Jun-2009	v01.0.0.1	Charlene van der Schyff	t158351	Edit language obtained from proof read language Juliet Gillies.