- Value date EOD journal entries to 23:59:59 on a given day and recalculate the accruals in case of backdated repayments / transactions. So that interest accruals are correctly accounted to the dates when the actions described below are performed.
Have Mambu post a manual DR interest income / CR interest receivable journal entry for loan accounts or DR interest expense / CR interest payable for deposit accounts when the above actions are performed to balance the interest applied against the posted interest accruals of a given day.
Mambu seems to violate the revenue/expense recognition principle by posting its EOD journal entries at 00:00:00 instead of 23:59:59. Most other systems would have post EOD journal entries such as interest accruals on the day that is being closed instead of the next day as Mambu does. Whilst Mambu calculates interest on the account balances of the previous day, it only posts the interest with a value date of the next day.
Furthermore, due to Mambu’s logic of when EOD journal entries are posted (at 00:00:00) trial balances, P&L and balance sheets do not report the expected values for a given day when certain transactions are performed that cause an update in interest accruals.
The inconsistency occurs when:
- Interest is applied to a loan account outside of a scheduled repayment becoming due e.g. manual application of interest and automatic application of interest when processing a prepayment.
- Accrued interest needs to be recalculated due to backdating of transactions such as disbursements and repayment on loan accounts or withdrawals and deposits on deposit accounts.
1) For more detailed use cases, see interest accrual FAQ