Payment allocation breakdown

There are instances where it is not sufficient to only know which finance agreement a payment received from a borrower applies to. An example would be in premium funding where a finance agreement could be made up of many insurance policies and a payment made could be for one of the insurance policy only, when that insurance policy in cancelled for instance.

As a result of this an extra level of allocation will need to be added after the bank statement import so that cleared payments received are not only allocated to a borrower loans, but cleared payments are correctly split to insurance policies within the borrower loan, which will later result in the correct term notes being paid.

Users will need to correctly split transactions to insurance policy level by navigating to either:

Home page > Borrowing 

Select “Payment Allocation Breakdown” under the “finance agreements” section.

OR

Banking > Bank Statements

Select the warehousing entity the bank account applies to 

Select “Payment Allocation Breakdown” under the “List” section

1. The user will be presented with a list of payments received from borrowers that have not been allocated against insurance policies. They can use the filter to further refine or filter for allocations previously made.

Breakdown Indicator - green if the user has already allocated the payment to insurance policies, else it will be orange.

2. click on the hyperlink on the payment line to allocate the payment down to insurance policy level. You will be navigated to the below page which will list all the insurance policies one under the other.

 Amount at top of page - The portion of the payment received that can be allocated to a lower level i.e., less any fees on the finance agreement. .

Allocate to drop down list– If the payment is for all insurance policies select “all policies”. If the payment is or a specific insurance policy, select “one policy”. If the payment is for more than one policy select "more than one policy"".

Allocate checkbox– Select the insurance policy/ies that are being paid. 

The amount of the allocation will be:

1. If one policy has been selected, then the full amount (i.e., less any fees)
   
2. If multiple policies have been selected, then a portion of the amount (i.e., less any fees). The portion is determined using the policy premium amount versus the total policy premium amount of all policies selected. 
   

            Example

            Policy A $1000

            Policy B $2000

            Policy C $5000

            Invoice              $500

            Payment received for $350 and it is allocated to “all”

            Policy A (1000/(1000+2000+5000)) * 350 = 

            0.125 * 350

            43.75

            Policy B (2000/(1000+2000+5000)) * 350 = 

            0.25 * 350

            87.50

            Policy C (5000/(1000+2000+5000)) * 350 = 

            0.625 * 350

            218.75

            43.75 + 87.50 + 218.75 = 350

3. The list of cleared payments allocated against an insurance policy will be visible in a tab at the bottom of the page when viewing an insurance policy against a borrower loan or application. 

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