Booking The Principal Amount Using An Adjustment

When a loan service agreement is activated (i.e., when its status changes from pending start to active ), an adjustment is created to book the principal amount. If the customer takes out a loan of 10,000, the adjustment's financial transaction looks as follows:

This adjustment is issued if:

• The service agreement's SA type indicates a special role of Loan.
• The loan service agreement's Total Amount to Bill contains an amount (i.e., the loan amount).
• The loan service agreement was created using a start option on Start/Stop Maintenance AND the start option references an adjustment type and this adjustment type has been set up as follows:
  • The adjustment type's distribution code should reference the GL account to credit (e.g., Cash).
  • The adjustment type's FT algorithm reference Payoff Amt = Adj Amt / Current Amt = 0 (booking principal only impacts a customer's payoff balance).

Note that because this financial transaction doesn't have a current amount (the customer doesn't actually owe a current amount yet), there is no need to book anything to the short-term receivables distribution code.