Inter-Branch Transfer GL Account
  • 23 Feb 2021
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Inter-Branch Transfer GL Account

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Overview

An Inter-Branch Transfer GL account is needed to correctly book any transactions affecting GL balances in two different branches in order to keep the integrity of the Balance Sheet at branch level.

The Inter-Branch Transfer GL account can be defined under Administration > General > Accounting as shown in the below image.

Administration screen with Inter-Branch Transfer GL account rules.

Inter-Branch Transfer GL Account Rule section

The Default Rule in which the suggest boxes will be pre-populated with "All Branches" (does not include Unassigned) and any GL account (asset type) can be added
The Custom Rules in which new rules can be added between branches:

  • From Branch to Branch
    When a user unassigned to a branch posts a transaction for a client assigned to a branch, the journal entries will be logged in client's branch, will not be logged through Inter Branch Transfer GL Account.

It will not be possible to delete  a branch if rules are defined for it and if Clients/Groups are assigned. Also it will not be possible to delete the GL account which was used when the rule was defined.

Please Note
That the Default Rule can not be deleted and the account set as the Inter-Branch Transfer GL account should be an Asset GL account

Accounting in Multicurrency

Please be Aware

The Accounting in Multicurrency feature is not enabled by default. If you would like to enable this feature for your organization, please contact your Customer Success Manager.

Please Note

The Accounting in Multicurrency feature has currently only been developed for Deposit Products created in a currency other than the base currency.

You can set new rules between branches for each currency.

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Usage and examples

The Inter-Branch Transfer GL account will be used by Mambu to log automatic JEs in the following scenarios:

  1. When a transfer transaction is posted between Clients assigned to different branches

An example of journal entries when a transfer of 100 is made from a deposit from a client assigned to Branch A to a deposit for a client assigned to Branch B:
Dr Savings Control of Member in Branch A 100
Cr Inter-branch account for Branch A 100

Dr Inter-branch account for Branch B 100
Cr Savings Control of Member in Branch B 100

  1. When a client is assigned to a different Branch

An example of a client with 500 outstanding loan portfolio and 100 interest balance assigned from Branch A to Branch B would be:
Dr Inter-branch account for Branch A 600
Cr Loan Portfolio in Branch A  500

Cr Interest Receivable in Branch A 100
Dr Loan Portfolio in Branch B 500

Dr Interest Receivable in Branch B 100
Cr Inter-branch account for Branch B 600

  1. When a User assigned to one Branch posts a transaction (e.g. disbursement or repayment) for a client assigned to a different branch

An example of a Credit Officer assigned to Branch A posting a repayment of 500 for a Client in Branch B via Cash would be:
Dr Cash in Branch A 500
Cr Inter-branch account for Branch A 500

Dr Inter-branch account for Branch B 500
Cr Loan Portfolio in Branch B 400
Cr Interest Receivable in Branch B 100

  1. When a User unassigned to a Branch posts a transaction (e.g. disbursement or repayment) for a client assigned to a branch

An example of a Credit Officer unassigned to a branch posting a repayment of 500 for a Client in Branch B via Cash would be:
Dr Cash in Branch B 500
Cr Loan Portfolio in Branch B 400

Cr Interest Receivable in Branch B 100

Please Note
The net balance on the Inter-Branch Transfer account should always be zero across all branches i.e. debits in Branch A will always be equal to credits in Branch B.

Manual Journal Entries

When posting manual journal entries for an inter-branch transaction with an Inter-Branch Transfer account defined, the user will need to manually define the relevant journal entries for the Inter-Branch GL account as well. An error message will be displayed otherwise.

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