Retail term money is a deposit or loan that has regular payments over a period of time, such as interest only, or principal and interest. Some retail term money deals have other fees, such as establishment fees that can increase the total amount of the deal. This increase does not generate cash flows, but it does increase the amount of the deal. Mortgages, sinking funds, and hire purchases are all examples of retail term money deals.
Repayment terms for retail term money differ from all other deal types. The due dates for retail term money deals are only forecast dates (except for principal adjustments). The forecast date and the split between the interest and the principal are calculated automatically, so when you actually receive funds, the split is recalculated to apply funds to outstanding interest up until the date when the funds are received. The balance is then applied to the outstanding principal. The repayment of funds is tracked through the bank reconciliation process, which automatically updates the transaction rows for retail deposits and advances, and sets the dates for settlement. The transaction is then ready to post journal entries.
Use the Retail Term Money window to enter your retail term money deals.
Navigate to the Retail Term Money window.
Select the company and counterparty for the deal in the Company and Counterparty fields.
If you are acting as a broker for a client, select the client.
Select a portfolio for the deal.
In the Deal Subtype and Product Type fields in the Main Details region, select a deal subtype and product type for the deal respectively.
In the Currency field, choose a currency. The default bank accounts for selected currency for the company and counterparty automatically appear in the Additional Detail region.
In the Principal Amount field, enter the principal amount for the deal.
In the Day Count Basis field, choose the day count basis for the deal. The day count basis determines the number of days in a year used to calculate accrued interest on the deal. The possible day count bases are: actual/actual, actual/360, actual/365, actual/actual-bond, actual/365L, 30/360, 30E/360, 30E+/360. For more information on how each day count basis is calculated, see: Treasury Terms.
In the Start Date and Maturity Date fields, enter a start date and a maturity date respectively.
Choose the Interest Details tab region.
Select a payment schedule for the deal in the Payment Schedule field. For more information on setting up payment schedules, see: Payment Schedules.
In the Initial Basis field, select the type of interest rate, either Fixed or Floating, for the deal.
In the Interest Rate field, enter the interest rate. The deal payments are calculated using this rate and are automatically entered into the Repayments field.
Choose the rounding rule that you want to use to calculate interest on the deal in the Interest Rounding field. The possible choices are: Nearest, Round Up, or Round Down.
Choose the days that you want to include when you calculate interest on the deal in the Interest Includes field. The possible choices are: First Day, Last Day, or Both Days.
Note: If you select Both Days for Interest Includes, you cannot use the 30/360, 30E/360, or 30+/360 day count basis.
In the Repayment Amount field, enter the amount of the deal that you are repaying.
In the Additional Details region, complete the necessary fields.
In the Brokerage region, complete the necessary fields.
Save your work.
You can adjust the principal on your loans as needed. For example, you may need to increase the loan amount or add a repayment in the middle of a roll period.
You can only decrease principal through an adjustment if the decrease occurs on a date that is not an existing settlement date. Otherwise, the outstanding principal is automatically adjusted during reconciliation.
When you write off a balance, you create a journal entry that corresponds to the amount of interest and principal that you write off. The amount of the write off/write on applies against the principal amount, and the amount of interest applies against the amount of interest written off.
In Retail Term Money window, identify the deal for which you want to adjust principal.
Choose the Transactions button. The Transactions window appears, listing all of the transactions for the deal.
Choose the Principal Adjustment button. The Do Adjustments/Writeoffs window appears.
Enter a date on which you want the adjustment to take effect.
Select an amount type for the adjustment. For more information on defining amount types for retail term money deals, see: Deal Types and Product Types.
In the Type of Adjustment field, select the type of adjustment that you want to make. The list of values available in this field differs depending on the amount type you selected.
In the Adjustment Amount field, enter the amount by which you want to adjust the principle.
The adjusted starting balance for the deal appears in the New Starting Balance field. The adjusted sum of the principal and interest payments for the deal appears in the New Principal And Interest fields.
If you want to keep the value of your deal repayments constant and apply the principal adjustment to your final repayment only, select the Keep PI Constant check box. The value of your final repayment is automatically recalculated.
Note: If you increase the principal of a retail term money deal and you want to extend the length of a deal to accommodate more repayments, you can manually extend the length of the deal.
If you want to adjust the value of all of your repayments, do not select the Keep PI Constant check box. The value of each of your repayments is automatically recalculated.
Save your work.
You can use the Interest Adjustment window to adjust the interest of your loans or deposits as needed.
In the Retail Term Money window, query the deal for which you want to adjust the interest.
Choose the Transactions button. The Transactions window appears.
Choose the Interest Adjustment button. The Interest Adjustment window appears.
Enter a new rate for the deal.
Enter a date on which you want the new rate to take effect.
The starting balance for the deal appears in the New Starting Balance field. The adjusted sum of the principal and interest payments for the deal appears in the New Principal and Interest fields.
If the deal is a fixed rate deal, enter a date until which you want the new rate fixed.
If you want to keep the value of your deal repayments constant and apply the interest adjustment to your final repayment only, select the Keep PI Constant check box. The value of your final repayment is automatically recalculated.
Note: If you increase the interest of a retail term money deal and you want to extend the length of a deal to accommodate more repayments, you can manually extend the length of the deal.
If you want to adjust the value of all of your repayments, do not select the Keep PI Constant check box. The value of each of your repayments is automatically recalculated.
Save your work.
Use the Schedule Change window to adjust the payment schedule or change the maturity date for a retail term money deal.
Set up payment schedules. See: Payment Schedules.
In the Retail Term Money window, query the deal for which you want to change the payment schedule.
Choose the Schedule Change button. The Schedule Change window appears.
If you want to change the maturity date of your deal, in the Maturity Date field, enter a date from which you want the payment schedule change to take effect.
If you want to change the payment schedule for your deal, in the Schedule Code field, select a payment schedule.
The number of payments remaining is recalculated and appears in the Num of Pymts Remaining field. The value of each repayment is also recalculated and appears in the New Principal and Interest field.
Save your work.
You can print the confirmation letters for principal adjustments and payment schedule change only through the Retail Term Money window. You can print confirmation letters for interest rate adjustments through the Retail Term Money window or through the Retail Transaction Rates window. See: Retail Transaction Rates.
Set up a default confirmation template for retail term money deals. See: Confirmation Template.
In the Retail Term Money window, query the deal for which you want to print a confirmation.
Choose the Print Letters button. The Print Confirmations window appears.
Select the template that you want to use for the confirmation letter.
Choose Submit to launch the concurrent process and print the confirmation letter.
Use the View Retail Term Money window to view the details of a retail term money deal.
In the View Retail Term Money window, query the deal that you want to view.
If you want to print a confirmation letter for the selected deal, choose the Print Letters button. For more information on printing confirmation letters for retail term money deals, see: Printing Confirmation Letters.
If you want to view the settlement details for the selected deal, choose the Settlements button. The View Settlement Summary window appears.
If you want to view the transactions that make up the selected deal, choose the Transactions button. The View Transactions window appears.
If you want to view the repayment history of the selected deal, choose Transactions button. Then, in the View Transactions window, choose the Repayments button.
Use the Transactions window to view a list of transactions for your retail term money deals.
In the Retail Term Money window, query the deal for which you want to view a summary of transactions.
Choose the Transactions button. The Transactions window appears. This window lists every transaction or payment period in the selected retail term money deal.
Use the Settlement Summary window to view a summary of your settlements for a retail term money deal.
In the Retail Term Money window, query the deal for which you want to view your settlement summary.
Choose the Settlements button. The Settlement Summary window appears.
Use the Repayment History window to view a history of your deal repayments. This window lists the amount of each repayment, the average amount repaid, the number of overdue repayments, the total number of overdue for all repayments, and total amount of remaining repayments.
In the Retail Term Money window, query the deal for which you want to view your repayment history and choose the Transactions button. The Transactions window appears.
Choose the Repayments button. The Repayment History window appears. This window lists every repayment for the selected retail term money deal.