Company Level Setup
Company Level Setup in Frappe Lending defines the default lending policies that apply across loan products, repayment processing, loan classification, collection behavior, and interest accrual. These settings help standardize lending operations while ensuring compliance and consistent loan processing throughout the organization.
To access Company Level Setup, navigate to:
Home → Accounting → Company → (Open Company) → LendingDid You Know?
Most Loan Products inherit their default lending policies from Company Level Setup, reducing repetitive configuration and maintaining consistency across products.
Prerequisites
Before configuring Company Level Setup, ensure the following master records are available:
- Company master
- Loan Classification master records
- Loan Demand Offset Order records
Configuring Company Level Setup
Follow these steps to configure company-wide lending settings:
- Open the required Company record.
- Navigate to the Lending tab.
- Configure Loan Settings and Collection policies.
- Set Loan Classification Ranges.
- Click Save.
Company Lending Settings
| Setting | Description |
|---|---|
| Enable Loan Accounting | Applies accounting-driven processing for lending transactions and records entries in the General Ledger. |
| Restructure Limit % (Overall) | Defines the maximum restructuring exposure allowed at the company level when branch-specific limits are unavailable. |
| Enable Async GL Reversal | Processes General Ledger reversals for cancelled future Loan Demands and Interest Accruals through background jobs. |
| Async GL Reversal Start Date | Specifies the date from which asynchronous GL reversal becomes effective. |
| Watch Period After Loan Restructure | Defines the monitoring period following loan restructuring for classification and NPA evaluation. |
| Interest Day Count Convention | Determines the day-count method used during daily interest calculations. |
| Minimum Gap Before First Repayment | Specifies the minimum number of days allowed between loan disbursement and the first repayment date. |
| Collection Offset Logic | Defines whether collection allocation follows NPA status or Days Past Due (DPD) policy. |
| Days Past Due Threshold | Stores the default company-level DPD threshold used for lending policy configuration. |
| Auto Write-Off Threshold | Defines the DPD limit after which automated loan write-off processing becomes eligible. |
| Collection Offset Sequences | Defines the default payment allocation order for Standard, Sub-Standard, Written-Off, and Settlement loan collections. |
| Loan Accrual Frequency | Determines whether interest accrual is calculated Daily, Weekly, or Monthly. |
Note
Loan Products can override several company-level defaults. If no product-specific configuration is provided, the system automatically uses the Company Level Setup values.
Loan Classification Ranges
Loan Classification Ranges define how loans are categorized based on their Days Past Due (DPD). These classifications help financial institutions comply with regulatory requirements such as RBI guidelines while automating loan monitoring.
Once the ranges are configured, the daily loan classification process automatically updates each loan account’s classification code and status according to its current DPD value.
Best Practices
- Configure company policies before creating Loan Products.
- Review DPD thresholds periodically to ensure regulatory compliance.
- Use asynchronous GL reversal for organizations processing high loan volumes.
- Keep collection offset sequences aligned with your institution’s recovery policies.
- Validate loan classification ranges carefully, as they directly affect NPA classification and collection workflows.
