| Hi All I think the solution described below might be too specific to GK to use in the platform. Mainly because it covers 2 use-cases in one go: the handling of recovery payments, and the handling of insurance claims. To zoom in on the handling of recovery payments (definition: All payments made into a loan after the date of write-off), the only change to be made there is to allow these payments without having to modify the loan. In a similar way we already allow to do transfers of payments out of overpaid loans without changing their status (but you can't make repayments anymore). The major difference between the recovery payments and the regular payments is in the accounting bookings. At the time of write-off the following bookings should be made: Write off the loan: Dr. Loan Portfolio (asset) Cr. Written off loans (Expense) A normal payment into a loan makes these bookings: Dr. Bank (Asset) Cr. Loan Portfolio account (Asset) Cr. Interest on Loan portfolio (if applicable) (Income) Cr. Fee accounts (if applicable) (Income) A recovery payment would be: Dr. Bank (Asset) Cr. Write-offs Recovery (Income) Once this is in place the handling of the second use case of dealing with insurance money can be easily solved on the portfolio side. Let's assume the insurance claims get handled seperately by seperate manual processes or software by the insurance company. In this case the journal entries that are made as soon as payout is done (Could already be automated from 3rd party apps using the predefined accounting rules): Dr. Bank (Asset) Cr. Insurance Payouts Received (?) Now the payment can be made into the loan (or multiple loans depending on the way the payout is handled) by leveraging on the Advanced Accounting rules already present. By setting up a specific fund-source for Write offs. This can then be linked with the advanced accounting to the Write offs Recovery Income account listed above. In this case whoever is processing the payment can quite easily select this fund source when doing so which would make the booking: Dr. Insurance Payouts Received (Based on Advanced Accounting config) Cr. Write offs Recovery. All recovery's should then be marked as such in the loan_transactions and also preferably captured in the loans table. All of this should not be a major change. You can now start reporting on recoveries and also have accounting in place, whether your recover from debt collectors, next of kin, or insurances. The main changes therefore would be: - Configuration of 2 new accounts (Write offs and Write off recovery) - Tracking of write off recovery in the loan transactions and loan derived fields In the future more fine-grained permissions on the fund sources might be desirable to avoid people using it by mistake, although maker/checker also covers for this. And you can consider whether it is worth automating/digitalising the insurance claims processes into MifosX although most insurance companies also provide their own portals. I think the solution described above is something that could be achieved in the relatively short term and covers 95% of the needs of the small and medium sized MFI's we have been working with. Keen to help out in drafting this functionality so we can put it in a JIRA item and tackle this. -- Sander van der Heyden  Mobile (Kenya): +254 (0)707211284 Skype: s.vdheyden Website: www.musoni.eu
Follow us on Twitter! Postal address: Hillegomstraat 12-14, office 1.11, 1058 LS, Amsterdam, The Netherlands On 27 Nov 2013, at 04:08, Nayan Ambali <[email protected]> wrote:
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