Loan accounting
Loan accounting software that ties your book to your accounts
For whoever has to make the loan book agree with the general ledger — every disbursement, repayment and accrual posted by double entry, so month-end stops being a reconciliation marathon.
It’s the third day of month-end and the loan book still won’t tie to the accounts. You’re rebuilding interest accruals in a spreadsheet, re-keying repayments as journals one by one, and chasing a difference that won’t close. The auditor’s coming, and you already know that when they point at a number and ask how it was built, you’ll be reconstructing the answer from memory and a stack of printouts.
Where it breaks
Why month-end turns into a reconciliation marathon
When the loans live in one system and the accounts in another, the gap between them is yours to close by hand — every period, accrual by accrual, journal by journal, until the numbers finally agree.
The loan system and the accounts never tie out.
Every loan event posts to the general ledger as it happens, so the book and the accounts are the same data, not two versions you reconcile by hand. Month-end starts from books that already agree.
Interest accruals get worked out in a spreadsheet every period.
Interest accrues automatically against each loan and posts to income on schedule. The marathon of building accruals by hand — and hoping the formula held — is simply gone.
Every repayment gets re-keyed into the accounts as a journal.
A repayment splits itself across principal, interest and fees and posts the journal for you. Nothing is entered twice, so the transcription errors that creep in between two systems can’t.
When the auditor asks how a number was built, you can’t trace it.
Every figure on the statements traces back through its journals to the loan and transaction behind it. You answer an audit query by drilling in, not by reconstructing the month from memory.
One repayment, posted for you
Repayment · Loan #4821 · received via mobile money
Illustrative entry — your real journals post automatically as loans disburse and repay.
How it works
How Lendbox automates loan accounting
Loan accounting software posts every disbursement, repayment, fee and accrual to the general ledger by double entry, so the loan book and your accounts stay one balanced, traceable set of records. Not a feature list — the four things that turn loan activity into a balanced, traceable set of accounts without anyone re-keying a journal or rebuilding an accrual.
Automated double-entry ledger
Every disbursement, repayment, fee and accrual posts to the general ledger by double entry as it happens — so your books are always live, always balanced, and built from the loan activity itself rather than re-keyed after the fact.
- Disbursements, repayments and fees post automatically
- Proper double entry — the ledger always balances
- A chart of accounts that fits how you report
- The loan book and the accounts are one set of data
Interest accrual & income recognition
Interest accrues against each loan and is recognised as income on schedule, so your earnings are stated correctly through the period without anyone rebuilding accruals in a spreadsheet. If you report under IFRS 9, that income follows the effective interest rate, which spreads up-front fees over the loan’s life alongside the interest.
- Interest accrued automatically per loan
- Income recognised on the right schedule
- No period-end spreadsheet to reconcile
Financial statements & trial balance
Pull a trial balance, profit and loss and balance sheet straight from the same posted activity — and drill from any figure back to the journals and loans behind it.
- Trial balance, P&L and balance sheet on demand
- Every figure drills down to its journals
- Reporting that traces to the loan behind the number
Bank reconciliation
Match what hit the bank against what posted in the ledger and clear the differences quickly, so cash is reconciled without a separate end-of-month ordeal.
- Match bank activity to posted transactions
- Surface and clear unreconciled items fast
- Cash position you can actually trust
Interest income
How loan accounting software applies the EIR
Under IFRS 9, interest income on a loan held at amortised cost is recognised at the effective interest rate (EIR): the single rate that discounts every expected instalment back to the cash actually lent. An origination fee deducted at disbursement is part of that calculation, so it is not income on day one — it is earned over the life of the loan. In the ledger, applying the EIR comes down to two things that have to happen correctly every month.
The monthly journal that releases deferred fees
At disbursement the fee is credited to a deferred origination fees account that sits against the loan, so the balance sheet shows amortised cost rather than the face amount. Each month-end the EIR is applied to the opening amortised cost. The contractual part of that income posts as accrued interest; the remainder is the fee release — debit deferred origination fees, credit interest income. Over the full term the releases add up to exactly the fee, and the deferred balance reaches zero with the last instalment.
- Opening amortised cost
- 11,640
- EIR income for the month
- 291
- Contractual interest
- 240
- Fee release to interest income
- 51
Month one of a 12,000 loan at 2% a month over 12 months, with a 360 fee deducted at disbursement — an EIR of 2.50% a month.
Stage 3: accrual switches to the net carrying amount
Once a loan is credit-impaired — Stage 3 under the expected credit loss model — interest income from the next reporting period is the EIR applied to the net carrying amount: the gross balance less its loss allowance. Interest on the part of the balance the allowance covers is no longer income. The switch should follow the loan’s stage rather than a manual month-end adjustment, and if the loan cures and leaves Stage 3, accrual returns to the gross amount from the following period.
- Gross carrying amount
- 8,000
- Loss allowance
- 3,200
- Net carrying amount
- 4,800
- Monthly interest income at the EIR
- 120
The same 2.50% monthly EIR: 120 a month on the net amount, where accrual on the gross balance would have booked 200.
Both are ordinary journals, so the test is the one this page applies everywhere: each figure should be computed from the loan itself and drill back to it, not be keyed in as a month-end adjustment that nobody can trace.
Month-end tie-out
Reconciling GLP to the general ledger
The gross loan portfolio (GLP) is the outstanding principal of every live loan — the figure the balance sheet carries as your loan asset and the base the loss allowance is set against. Reconciling it means rolling the opening balance forward through the period’s movements and proving the closing balance equals the loan principal control account in the ledger. Each roll-forward line is one kind of journal, so the two can only differ if a posting is missing or misclassified.
| Roll-forward line | Movement | What posts in the ledger |
|---|---|---|
| Opening gross loan portfolioThe balance on the loan principal control account at the start of the period. | 1,250,000 | The balance on the loan principal control account at the start of the period. |
| DisbursementsDebit loan principal, credit cash or bank — one journal per loan paid out. This is the only line that grows GLP. | 180,000 | Debit loan principal, credit cash or bank — one journal per loan paid out. This is the only line that grows GLP. |
| Principal repaymentsDebit cash or bank, credit loan principal — the principal split of each repayment. The interest and fee splits post to income and never touch GLP. | 142,500 | Debit cash or bank, credit loan principal — the principal split of each repayment. The interest and fee splits post to income and never touch GLP. |
| Write-offsDebit the loan loss allowance, credit loan principal. The loan leaves the book; the expense was recognised earlier, when the provision was raised. | 7,500 | Debit the loan loss allowance, credit loan principal. The loan leaves the book; the expense was recognised earlier, when the provision was raised. |
| Closing gross loan portfolioMust equal the loan principal control account at period end. Any difference sits in one of the three lines above. | 1,280,000 | Must equal the loan principal control account at period end. Any difference sits in one of the three lines above. |
Two balances that sit beside GLP, not inside it
Loss allowance
The loan loss reserve / allowance is a contra-asset: the balance sheet shows GLP, deducts the allowance and reports the net loan book. Raising a provision debits expense and credits the allowance, and a write-off draws the allowance down — so the write-off line in the roll-forward should equal the period’s debits to the allowance account.
Accrued interest
Interest earned but not yet collected is accrued interest: debit interest receivable, credit interest income. It is a separate balance-sheet line, never part of GLP, and the interest portion of a repayment clears the receivable rather than reducing principal. Keeping it out of the roll-forward is what stops the tie-out drifting by exactly the interest you have accrued.
Lendbox posts each of these movements as a journal from the loan event itself, so the roll-forward and the control account are built from the same entries. When a difference does appear, you drill from the figure into the journals behind it instead of rebuilding the period in a spreadsheet.
Proof
We developed complex templates, but manual processes made it impossible to stay efficient — errors became inevitable, and scaling up felt out of reach. We no longer need multiple templates or manual reminders; the platform handles it all, improving accuracy, transparency, and risk management.
- 5×
- funds under management
- 1 default
- in 4 years
- Fewer
- manual templates & errors
Questions lenders ask about loan accounting
- Loan accounting software posts every disbursement, repayment, fee and interest accrual to the general ledger by double entry, so your loan book and your accounts are always one balanced, traceable set of records. Lendbox posts each loan event for you and produces a trial balance, P&L and balance sheet straight from the same data.
- Lendbox posts every loan event — a disbursement, a repayment, a fee, an interest accrual — to the general ledger by double entry the moment it happens. The loan book and the accounts are the same underlying data rather than two systems you reconcile by hand, so your books are already in agreement when month-end comes around.
- Yes — Lendbox accrues interest against each loan automatically and recognises it as income on schedule, so your earnings are stated correctly through the period without anyone rebuilding accruals in a spreadsheet. The period-end calculation that used to be a marathon — and a source of errors — happens on its own. Our loan accounting 101 guide walks through how accrual, amortisation and interest fit together.
- Yes — when a repayment comes in, Lendbox posts the double-entry journal automatically, splitting across principal, interest and any fees. Nothing is entered a second time into a separate accounting system, which removes the transcription errors that otherwise creep in between two books.
- Yes — Lendbox lets you pull a trial balance, profit and loss and balance sheet straight from the posted activity, and drill from any figure back through its journals to the loan and transaction behind it. On the balance sheet the loan book appears as the gross loan portfolio, with any loss allowance set against it, and both trace to the same journals as everything else. Reporting comes from the same data the loans run on, so the statements always reflect the book.
- Lendbox keeps a complete audit trail: every figure on the statements traces back through its journal entries to the loan and transaction that created it, with a timestamped record of what posted and when. When an auditor asks how a number was built, you answer by drilling into it rather than reconstructing the month from memory.
- Yes — Lendbox bank reconciliation lets you match what hit the bank against what posted in the ledger, then surface and clear any unreconciled items quickly. Cash gets reconciled as part of the normal flow instead of becoming a separate end-of-month ordeal, so your cash position is one you can actually trust.
What is loan accounting software?
How does Lendbox keep the loan book and the accounts in sync?
Does it handle interest accruals automatically?
Will a repayment post the right accounting entries?
Can I produce a trial balance and financial statements?
Is everything traceable for an audit?
Does it reconcile against the bank?
Make month-end short and the numbers trustworthy
Start a free trial of Lendbox and let every loan event post to the ledger for you — a book that already ties to the accounts.
No card required.
Where to go next
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