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GMS-RLSS provides a valuable tool for calculating loan payoffs, and the final scheduled payment is, in effect, a loan payoff. Try to be aware of which loans are due to payoff. A good tool to assist with the calculation of what amount the final payment should be is Loan Payoff, found under the Features menu. This feature can be used to determine principal due, accrued (past due) interest due, and any interest that has accrued since the most recent activity was posted.
When calculating final payment, Loan Payoff requests a date, and will include interest through that date. However, unless the payment is received on that same date, the interest portion of the final payment calculated when the payment is actually posted will likely be a different amount. This is especially evident if the loan has been set within the Master File as Daily interest.
When posting the activity, review the calculations for interest and principal as they appear on screen. If the “new balance” is not zero, edit the current interest field and increase/decrease it as necessary to create a zero balance. An easier method may be to post this activity using the Adjustments screen and enter each amount as it appears on the Loan Payoff.
It is advised that you discuss this procedure with your auditor or comptroller. By decreasing the interest amount in order to zero the balance, you are basically waiving interest due your agency. If the amount is small, this will probably be acceptable. Likewise, increasing the interest portion may mean you are charging the borrower too much interest. Again, a very small amount may be acceptable.
If final payment has already been recorded, and the loan balance is now a small negative or positive number, an adjusting entry can be done to zero the balance. Using Loan Activity, Adjustments, and the same activity date as used to post the final payment, enter a repayment with activity total zero. Entering a positive number within the interest field will result in a negative to principal, netting a balance increase. Entering a negative number within the interest field will result in a positive to principal, netting a balance reduction. By editing interest and reviewing “new balance” and reediting if needed, you should be able to easily zero the loan balance.