I use several loan accounts. These are required to be interest bearing. This means that every month, interest on the loan balance must be calculated and accrued to the balance. To be truly accurate, every time the loan balance changes, you should re-calculate the interest for the days since the last change. These amounts should be summed at the end of each month and added to the balance. To do this, I have to keep a separate spreadsheet with the calculations and manually transfer the amounts to the loan account every month. If a historical transaction is added, all of the values in the spreadsheet change and thus all the interest transactions for the complete loan account must be changed in manager. It would be great if these interest calculations could be performed by manager automatically. You would only need to configure the interest rate and the method of interest accrual (daily/monthly/yearly).
Wow, if this kind of functionality is built into Manager it it makes an already outstanding product unique!
“IF” Manager did have such a feature then the monthly accounting entry would have to be manually triggered rather then being an automatic end of month entry as transactions relating to the month may remain unprocessed until some point in the future.
The question is - once the accounting entry has been posted, can that interest entry or any previous month interest entry be allowed to be adjusted due to a historical transaction. Each month affect by that historical transaction would have to be re-triggered.
What if that transaction was in a prior year, and end of year accounts and tax returns were completed.
While a transaction can be processed to the original date, re-calculating the interest could be problematic, otherwise the concept has merit but probably not a wide application - one to put in the melting pot for future consideration
@John_Hope_Bailie, what are these loan accounts? Loans you give to other entities? Because that’s the only time I’d consider this to be useful.
Good points. I was interested as to whether this was of general interest. I guess not. Also it seems tricky to implement. Thanks for the comments.
Yes. You are correct. Typically when several people are involved in owning a property (or a business) and they assist by paying for various expenses without the intention of being reimbursed until a later date. One wishes to keep track of this as well as interest that the outstanding balance should earn in order to be fair to the lender
I forgot to add, on the assumption that you can’t re-trigger a month, you could always use a General Journal to take up any prior period interest adjustments.
@lubos is something done in response to the topic raised in the thread? the auto interest calculation on loan accounts, auto calculation of rents and any other financial commitments that arises with time might be calculated automatically and users might always have handy report of what are their liabilities that have arisen over time.
Those I think are very essential features an accounting software should have like many others do.
Nevertheless I have already started setting up manager. I am learning and using great features it has but to know that it doesn’t have auto interest calculation is a bit of disappointment.
Thank you for the great work so far.
This is a 5 year old thread - it is most unlikely that anything will come of it other than a record of ideas from 5 years ago
For automatic rents and so on you can use Recurring Settings (Sales and Purchase Invoices / Journal Entries).
For automatic interests and loan amortization you simply cannot. We had to create a specific external excel plugin to automate journal entries for amortization plans and interest calculation that are imported monthly via batch create.
See this topic: Financial Amortization Schedule