NetLoan - Payment Type Amortization Setup
Payment Type Amortization Setup
Occasionally, the payments under a payment type will need to be amortized so that the revenue or expense is recognized over the term that it is earned. In these cases, you will need to provide the below information in the amortization information section of the payment type record:
| Field | Description |
| Fee Amortization Method | Determines how the payment will be amortized over the period in which it is earned |
| Default Amortization Duration | Sets a default number of periods over which the payment is amortized (optional). If left blank it will default on the terms of the loan |
| Amortization Balance Account Override | Will override the balance account used when the payment is first made and that will then be reduced when it is earned |
Step-By-Step Setup
- Firstly, you will need to select the method you would like to use to amortize the income generated by this payment.
- Only if needed, you can select a default amortization duration if this should be set to a specific number of periods disregarding any loan characteristics. If you leave this field blank it will default to the remaining loan term at the time the payment is incurred.
- Next, the Amortization Balance Account Override field can be used if the amortization balance account for this payment should differ from that selected on the loan type. This is usually the case when you have multiple amortized payments.
- Save the Payment TYpe record to apply these changes.