Loans

The Loans module in Zoho ERP helps you manage all the loans that you’ve provided to your employees. You can deduct repayments from the employees’ salaries each month automatically, set perquisite rates and record manual repayments as well.

Recording Loans

To record a loan,

Go to Payroll on the left sidebar.
Navigate to Loans tab on the module bar on top.
Click + Add.
Select a Loan Type.
If you haven’t created a loan type, you can create loan types by clicking Manage Loans. Enter a name and the perquisite rate, then click Save and Continue.

Note: Perquisite rate is the percentage of the loan amount which will be considered as a perquisite. Ideally, it should match the rate provided by the State Bank of India.

Select the employee for whom you’re recording the loan.
Enter the Loan amount and Disbursement date, which is the date on which the employee received the loan amount in their account.
If the disbursement date falls on a date before you started using Zoho ERP and the loan is partially repaid, enter the Loan Opening Balance and the Perquiste Opening Balance to continue the remaining repayments in Zoho ERP. In case no repayments have been made, enter the actual loan amount as the Loan Opening Balance.
Enter a reason for providing the loan.
Select whether you want to exempt perquisite calculation for this loan. Loans provided for medical reasons and loans under Rs. 20,000 should be exempted from perquisite calculation.
Enter the Repayment Start Date and Instalment Amount.
Click Save.

You’ve now recorded the loan. Repayments will be automatically deducted from the employee’s salary during each pay run. If you’ve already collected any repayments, you can record them as manual repayments. Once the employee has completed all repayments, Zoho ERP will mark the loan as closed.

Your employees can view the details of the loans they’ve received by logging in to their employee portal.

Recording Manual Repayments

You may need to record manual repayments if the employee makes a repayment outside the regular payroll cycle, such as a direct payment, a lump-sum repayment, or a payment collected before the pay run is processed. Here’s how:

Go to Payroll on the left sidebar.
Navigate to Loans tab on the module bar on top.
Click the employee loan for which you want to record repayment.
Click Record Repayment.
Enter the Repayment Amount.
Select a Repayment Date.
Select the Payment Mode used by the employee to make the repayment.
Enter the Reference Number (optional).
Click Record Repayment.

Managing Loan Types

You can manage the various loan types you’ve created by following these steps:

Go to Payroll on the left sidebar.
Navigate to Loans tab on the module bar on top.
Click the More (three horizontal dots) icon and select Manage Loans.

You can manage loan types by creating new ones and maintaining existing loan configurations. This includes updating loan details such as the loan name and perquisite rate, as well as removing loan types that are no longer required.

Make the changes as required and click Save.

Pause and Resume Loans

During times of financial difficulty or unforeseen personal circumstances, providing financial support can help employees manage critical situations more effectively. Zoho ERP allows you to pause employees’ loan instalment deductions briefly using the Pause option.

To pause a loan:

Go to Payroll on the left sidebar.
Navigate to Loans tab on the module bar on top.
Select the employee for whom you want to halt the loan repayments temporarily.
Click the More icon (three horizontal dots) on the top right corner and select Pause Instalment Deduction.
You can choose to pause the loan instalment deductions Immediately or from a Scheduled month.
If you’ve selected On Scheduled Month, select the month from which the instalments need to be paused.
Select the month from which you want to resume the loan deductions. If you do not want to specify it, you can leave it empty.
Enter a reason and click Save.

The loan deductions will be paused for the employee for the selected period. You can find these details in the respective employee’s profile under the Loans tab as well as in the Loans module. You can also select or edit the month on which you want to resume the loan deductions here.

Alternatively, you can edit the resume month after you’ve processed the next pay run.

To change the resume month:

Go to Payroll on the left sidebar.
Navigate to Loans tab on the module bar on top and select the paused employee loan you want to resume.
In the information banner on top of the loan details, click Edit Resume Month.
In the pop-up, choose when you want to resume the loan deductions, Immediately or On a Scheduled Month and click Save.

Loans deductions will be resumed accordingly.

Deleting Loans

Prerequisites: The loan you are about to delete should not be involved in the previous or current pay runs and must not have any perquisite calculations associated with it.

To delete an open loan:

Go to Payroll on the left sidebar.
Navigate to Loans tab on the module bar on top.
Select the employee for whom you want to delete the loan.
Click the More (three horizontal dots) icon and select Delete Loan.
Select Yes to confirm that you want to delete the loan.

To delete an open loan which was involved in a pay runs or multiple pay runs and has associated perquisite calculations, revert the pay run and then follow the mentioned steps above.

Deleting a Manual Repayment

You can delete manual records of loan repayment in the Loans module as long as the payroll for the repayment month is not processed. If the pay run is processed, you will have to revert the pay run and then delete the loan repayment record. To delete:

Go to Payroll on the left sidebar.
Navigate to Loans tab on the module bar on top.
Select the employee for whom you want to delete the loan.
Click the Trash icon next to the manual repayment record.
Select Yes to confirm that you want to delete the loan.

Once deleted, the manual repayment record will no longer be reflected in the employee’s loan details.