Hi Everyone,
We have configured a standard Loan and Loan Repayment Schedule for an employee, which automatically creates loan deductions in the Monthly Salary Slip.
Use Case 1:
During a 12-month repayment cycle, an employee has requested to pause/skip their loan deduction for 1 to 2 months due to a personal emergency.
What is the recommended way to handle this in ERPNext without disrupting the remaining schedule or causing double deductions? Should we skip the entry, alter the repayment schedule, or use a custom adjustment?
Use Case 2:
An employee has 3 remaining unpaid installments left on their loan. They have requested that the entire remaining balance be deducted at once in the upcoming single payroll cycle instead of continuing over the next 3 months.
What is the best practice to settle the full remaining loan balance in a single Salary Slip while properly updating/closing the Loan Repayment Schedule?
Any guidance or workarounds would be appreciated!
In the first case, it’s important to avoid simply changing the deduction to zero for that month, as it can disrupt the repayment schedule. There have been reports of skipped instalments leading to the doubling of the following month’s deduction.
For the second case, it’s advisable to treat it as an early or full repayment instead of attempting to fit three instalments into one Salary Slip. The key is to ensure the repayment is accurately reflected against the loan, so the remaining schedule is cleared correctly.
I wonder if the current Frappe HR loan flow has a standard method for handling both of these situations, or if people are still using schedule adjustments or customisation.
Thanks, I don’t think there is a standard process to manage these cases because I have checked every document, like the loan, the loan repayment schedule, the loan repayment, and the loan process accrual.
So you’re suggesting we leave the loan process as is, but create a new salary component for the amount and manually adjust the remaining repayment schedules?
I would be careful about adding a separate wage component and manually modifying the schedule, because then the real loan balance and the payback history could go out of sync. If certain months are missing, it may be wiser to update the outstanding installments and their dates, providing prior repayments are not affected. I would record the full settlement as another loan repayment and then update the schedule to show the debt cleared. What I don’t know, and wonder if ERPNext allows, is to accomplish this neatly after the deductions are linked to Salary Slips, without manual reconciliation.