Tally · loan and hire-purchase finance

Tally for loan finance: hire-purchase contracts and the overdue list.

The hire-purchase book kept in Tally itself, from the agreement to the NOC.

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What it is: A TDL module for TallyPrime
Interest: Flat or IRR, per contract

The problem

A vehicle financier's book is a stack of contracts, and each one runs the same course:

AgreementHirer, guarantor, vehicle, amount
ScheduleInstalments, due dates, interest
CollectionCash or cheque, against the instalment
OverduePenalty, bounce, reminder, notice
ClosureLast instalment or foreclosure, then NOC

Standard Tally sees the money going out and coming in. None of the rest.

Watch a 14-minute walkthrough of the module

Tally has a ledger for the hirer and a receipt for the money, and nothing else. So the schedule lives in a register or a spreadsheet, and the collector goes out with a printed list. Ask who is two instalments behind and someone opens the register.

What the loan finance module adds to TallyPrime

The module is a TDL customisation for TallyPrime, written for loan and hire-purchase financiers. It works on the company you already have.

The contract as a master. Hirer and guarantor with their addresses and KYC (PAN, Aadhaar, voter card, passport), the amount financed, the number of instalments and the instalment amount. Dealer, product and insurance are masters of their own, for two- and four-wheeler finance.
The schedule worked out for you. Each instalment, its due date and its split between principal and interest, calculated when the contract is saved and carried into the hirer's ledger.
Branches and collectors. Each contract sits under a branch and a collector, so the overdue list can be cut by either.
An Excel import, for bringing contracts in rather than keying them one by one.

Vouchers

Instalment entry. Pick the contract, mark the instalments received, one or several, with the cheque number. The receipt voucher is created against the hirer, carrying the instalment number.
Penalty. Add a late-payment penalty at receipt and a sales voucher is raised for it, with CGST and SGST.
Cheque bounce. Its own voucher type, posting the bounced amount back against the hirer and the bank.
Due date extension for a hirer given more time, and force close for a contract settled early.
Reminder, legal notice and NOC. Each is recorded against the contract and printed from it. The reminder records the guarantor's name, mobile and PAN; the notice cites the hire-purchase agreement number.

Flat or IRR

Most hire-purchase is sold at a flat rate: interest on the full amount for the full term, divided equally across the instalments. That is how the hirer understands it, and the module can keep it that way.

But the balance falls every month, so equal interest overstates what is earned late in the contract and understates it early. Set the contract to IRR and the module finds the rate the instalments actually earn, then splits each one on the falling balance: more interest at the start, more principal at the end. The hirer pays the same either way. Your interest income lands in the month it was earned.

From the module's own schedule: ₹1,50,000 financed, 15 instalments of ₹12,500, ₹37,500 of interest. On IRR, the split runs like this.

No.	Principal	Interest	Balance
1	8,107.41	4,392.59	1,41,892.59
2	8,344.82	4,155.18	1,33,547.77
8	9,922.67	2,577.33	78,089.14
15	12,144.37	355.63	0.00

On flat, every one of the 15 would carry ₹2,500 of interest.

Reports

Dues. Instalment details per contract, with cheque, payment date and days late; due instalments; overdue instalments; outstanding due summary; actual dues against the schedule; due-days-wise; branch-wise and collector-wise.

Hirers and cases. Hirers by name, hirers with guarantors, repeat customers, foreclosed cases, reminder notices issued, NOCs issued.

The business. Month-wise business, and finance by amount range and by month range.

Credit bureau data. Each hirer's date of birth, gender, PAN and passport, laid out with your member ID and reporting cycle for bureau submission.

Two reports catch what a register never does. Cases matured but not closed: the term has run out and money is still due. NOC issued but balance in account: the paperwork says closed and the ledger does not.

Questions

Can Tally calculate IRR on a loan?

Not on its own. Standard TallyPrime records the receipt you enter; it does not know there is a schedule behind it. With this module the IRR is worked out per contract and each instalment's interest is posted from it.

We already run our book in a spreadsheet. Do we start again?

No. The module has an Excel import for contracts. How much of a running book comes across that way depends on how the sheet is kept, and that is the first thing to talk through.

Talk to us

Call +91 161 5044 180 and describe your book: flat or reducing, how many branches and collectors, and where the schedule lives today. That is enough to say what this would involve for you.