oracle loans presentation

Oracle Loans

Lessons LearnedFebruary 26, 2010 (1:20 – 2:00 PM)

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Presented By

Sharon [email protected]

Rajan [email protected]

Discussion Topics

Oracle Loans Implementation Experiences:

How Loans integrates with Financial Modules

How Loans Generates Income

How Loans Generates Disbursements

How Dates and Schedules affect loans processing

How to use loan conditions

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How loan approvals function

How loan restructuring works

How to update loans

What about data conversion?

Questions and Answers

Loans Integrates with Other Modules

•Accounts Receivable

•Loans uses Customer Master file for Borrower or Co-Borrower information

•Can update Customer Master files from Loans

•Loan billing program sends invoices to AR

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•Invoice number same as Loan number

•Separate invoices for principal, fees, and interest .

•Reverse last bill program provided .

•Receipts application or adjustments in AR are refle cted in Loans immediately.


•Accounts Payable

•Loans uses Supplier Master file for Disbursements

•Can update Supplier Master files from Loans

•Payment need not be to borrower.

•Multiple disbursements are available.

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•Multiple disbursements are available.

•Loans sends Disbursement Invoices to AP

•Invoice number contains Loan number.

•Once payment is disbursed, the loan is updated to a ctive status.


•General Ledger

•Accounting

•Loan types are defined with accounting for booking and billing of principal and interest.

•Fees are defined with accounting that will be creat ed on the invoice when fee is billed.

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the invoice when fee is billed.

•Once a loan is active, accounting can be interfaced to GL, similar to other financial modules.

•Funds checking is available for federal application s.


•Accounting Setup for Loan Type

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Loans Generates Income

•Fees

•Fees are defined by Administrator and can be recurr ing, event based, or manual.

•Fees can be assigned to a loan for every billing or a single billing.

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•One receivable account is defined for use with all fees.

•Fee revenue accounting is unique for each fee.

•Fee accounting is passed to AR for fee invoice.

•Fees are billed at the same time as other billings.

•Can assign late penalties and grace periods to each loan.


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•Interest

•Interest calculations are based on a number of day counts.

•Indexes can be defined to default interest rates.

•Interest bills can be on a separate schedule from

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•Interest bills can be on a separate schedule from principal.

•Interest rates can be changed as of a billing date only.

•Interest only billing is available.•Balloon payment


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Loans Generates Disbursements

•Disbursements

•Made through Payments Module

•May be single or multiple disbursements for a loan

•Multiple disbursements may be to different supplier s.

•Billing is possible only after final disbursement.

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•Billing is possible only after final disbursement.

•Loan Status becomes active.

Loans Generates Disbursements

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Dates and Schedules Affect Processing

•Dates

•Origination Dates

•Application Date

•Disbursement Phase Start Date

•Terms Start Date

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•Terms Start Date

•Payment Start Date

•Maturity date is calculated based on loan term.

•Changing dates

•Payment start date change does not change maturity date.


•Amortization Schedules

•Created automatically based upon entered loan data.

•Maybe downloaded, customized, and uploaded

•Customized schedule limits functionality

•Payoff calculation must be done manually

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•Payoff calculation must be done manually

•If a manual bill is used, remaining balance of sche dule must be manually updated.

•If loan start date changes, schedule must be manual ly updated.

•Current amortization schedule created after loan app roval

•Incorporates billing and payment information


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Using Conditions

•Conditions

•Created before they are assigned to a loan

•Various types

•Approval, Servicing, etc.

•May be mandatory or not

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•May be mandatory or not

•If a mandatory for approval a condition must be che cked for approval process to run.

•Conditions may be added or removed from individual loans.

Using Approvals

•Approvals

•Approval steps use Oracle’s notification system bas ed upon each loan’s class and type.

•Approver may approve, request information, or rejec t loan.

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•Automatically generating AP invoice upon approval i s optional.

•When approved the loan status becomes “In Funding” until disbursement is completed.

When payment is disbursed, loan status becomes ”Acti ve”.

Using Approvals

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Using Restructuring

•Restructuring using ERS

•(Extended Repayment Schedule)

•ERS can be used to convert AR invoices to a loan.

•ERS can be used to restructure loan, or loans to sa me borrower, by combining all loan invoices (principal ,

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borrower, by combining all loan invoices (principal , interest, and fees) into a new loan

•This process can capitalize interest invoices

•Simple extension of time with same or changed inter est rate does not require this process.

Using Restructuring

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Updating Loans

•Updates depend upon the loan status and field.

•Once loan is saved the Borrower Loan number, and lo an type cannot be changed. (Loan type dictates account ing.)

•Loan officer can be changed on individual loan, or a

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•Loan officer can be changed on individual loan, or a process will change all of an officer’s loans to a new officer. This can be done at any status.

•Once loan is approved, the payment start date, inte rest rate on future billings, and fees can be changed. Application date, terms start date, payment frequen cy, amount, and term of loan cannot be changed.

Data Conversion

� Customer Master files should be updated first.

� Disbursements� In order to achieve an “active” status for a loan, either

disbursements or custom process can be used.

� If disbursements are converted, Supplier Master file must be updated before the disbursements are created.

� Consider whether to bring over history or current balance only

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current balance only� Opening periods for historical information

� Allowing accounting flexfield values to be used that may have been end-dated

� The loan billing program creates one invoice at a time.

� Assigning a fee to a loan prior to current date

Data Conversion Tool

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Questions and Answers

Questions and Open Discussions

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Contact Information

Sharon PearisoEmail: [email protected]

Phone:

Rajan Mankame

•Email: [email protected]

•Phone: For Presentation Copy Visit

www.astcorporation.com/papers

oracle loans presentation

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