Hello, how can i use special accounts to track loans disbursed and interest income received, i have gone through the guideline but i didn’t understand its application for Microfinance business, please help.
You need to create a custom control account to record the assets represented by each special account you create for a loan. When you disburse money for a loan, select that control account and the subaccount for the special account. When you receive money for a loan, divide the receipt into two lines, one posted to the custom control account and the other to an interest income account.
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You can also create a Customer (Loan Account) and a Supplier (Deposit Account) accounts for the same customer. When you approve the loan, Debit the Customer account and Credit the Supplier Account with a journal entry. When the customer comes to withdraw, Debit the Supplier Account and Credit cash with Payments.
This method allows you to easily share a Statement with the customer.
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