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 Repayment

Use

If you have paid a loan to an employee, he/she usually repays the amount in regular partial amounts. The loan repayment is made up of a repayment share, which reduces the loan amount paid for each loan period, and an interest share.

The type of loan repayment is stored in different loan categories . The start of repayment and repayment pattern are stored in different loan conditions .

Prerequisites

In Customizing for Payroll under Start of the navigation path Loans Next navigation step Master Data Next navigation step Loan Types End of the navigation path , you have made the following settings:

  • you have specified the assignment of loan categories to loan types in the Technical Attributes view.

  • you have specified at least one loan condition for each loan type in the Conditions view.

Features

The system distinguishes between the following loan categories:

  • Repayment in installments

    In this case, the employee regularly pays a repayment installment . This installment contains only the repayment. The interest receivable is added on in every payroll period. The total amount that the employee must pay in every period, therefore changes. As the term of the loan progresses, the amount gets less and less, as the remaining debt and also the interest receivable from the employee decrease.

  • Annuity repayment

    In this case, the employee regularly pays an annuity installment . This installment contains both the repayment and the interest. The total amount of the repayment and interest payment thus remains constant. This type of repayment is issued on a more regular basis, as the charge to the borrower remains constant for the complete term of the loan.

    Note Note

    Note that for the installment and annuity repayments the last installment is almost always lower than the other installments because the system usually cannot distribute the amount to be repaid equally amongst all installments.However, the last installment is always large enough so no further distribution to other installments is necessary.

    End of the note.

  • Recurring advance

    In this case, you can pay the employee a certain amount on one occasion. The recurring advance is not repaid and no interest incurs. The employee must only repay the amount when he/she leaves the enterprise.

    Example Example

    Expenses of 1,000 euro regularly incur for an employee in the external sales force. So that the employee does not have to pay this amount from his own pocket, he/she receives a one-off recurring advance of 1,000 euro. Each time expenses are accounted at the end of a payroll period, the employee is repaid exactly the amount that he spent on expenses in this period. This does not affect the recurring advance. On leaving, the employee must only repay the enterprise exactly 1000 euro.

    End of the example.

Activities

When you create a loan for an employee in the Loans infotype (0045), specify the following information for repayment:

  • Loan type

    This loan type has been assigned a certain loan category in Customizing. In this way, you determine the way in which the employee must repay the loan.

  • Loan condition

    This allows you to specify the repayment pattern for the loan. The loan conditions that you can select here depend on the loan type.

  • Repayment start date

  • Amount of the repayment or annuity installment