The Chart of Accounts (CoA) is a list of accounts in the general ledger, systematically classified by title and number. The account number is referred to as the GL code. The appropriate financial transactions are posted against these GL codes. Mifos provides a default CoA. From Mifos 1.1 onwards, the CoA configuration is in XML. This section in Configuring Mifos describes how to customize your own CoA.
See also: Microfinance Accounting Issues
All offices under the HO use the same CoA. The list of accounts is organized into the following general ledger categories:
The Mifos CoA supports up to four levels of categories.
Mifos supports and ships with the following CoA in the configuration file.
Please review the following information very carefully:
10000 -- ASSETS 11000 -- Cash and bank balances 11100 -- Petty Cash Accounts 11101 -- Cash 1 11102 -- Cash 2 11200 -- Bank Balances 11201 -- Bank Account 1 11202 -- Bank Account 2 13000 -- Loan Portfolio 13100 -- Loans and Advances 13101 -- Loans to clients 13102 -- Emergency Loans 13103 -- Special Loans 13200 -- Loan Loss Provisions 13201 -- Write-offs 20000 -- LIABILITIES 22000 -- Interest Payable 22100 -- Interest payable on clients savings 22101 -- Interest on mandatory savings 23000 -- Clients Deposits 23100 -- Clients Deposits 23101 -- Savings product 1 23102 -- Savings product 2 24000 -- Mandatory Savings 24100 -- Mandatory Savings 24101 -- Mandatory Savings Accounts 30000 -- INCOME 31000 -- Direct Income 31100 -- Interest income from loans 31101 -- Interest on loans 31102 -- Penalty 31300 -- Income from micro credit & lending activities 31301 -- Fees 31302 -- Processing Fees 31303 -- Annual Subscription Fee 31401 -- Income from 999 Account 40000 -- EXPENDITURE 41000 -- Direct Expenditure 41100 -- Cost of Funds 41101 -- Interest on clients voluntary savings 41102 -- Interest on clients mandatory savings
Users should not edit a GL code post-installation. The CoA is set once in Mifos, at implementation time. Thereafter, the existing GL Codes should not be edited/deleted. However, new GL Codes can be added under defined sub-categories.
Mifos is required to make debit/credit entries, in a transactions table, when a transaction is made. The entries should be made against the lowest level GL Code under a category. For example, a fee transaction is:
An example of complete financial transaction: If a loan payment of Rs. 1000 is received (by cash) for installment 3 on Jan 1st, 2006 and a user with username mariea records it in the system on Jan 3rd, 2006, Mifos will make the following entries in the transaction table:
|Date||Date of transaction- 01/01/2006|
|Payment ID||System generated payment ID|
|Receipt/check number and date||As specified by the user|
|Transaction ID||System generated transaction ID|
|Related transaction ID||- (relevant only for an adjustment)|
|Installment number||3 since the payment is made for installment 3|
|Balance||Remaining loan balance (remaining principal + interest + fees ) to be paid|
The CoA is divided into four categories: ASSETS, LIABILITIES, INCOME and EXPENDITURE. The sign of the entry depends on whether it’s a Dr or a Cr AND under which category it is being recorded. The category is included in parenthesis for each accounting entry. While making the accounting/financial entries, the following rules should be used for the signs based on which category the entry falls under.
Assets and Expenditure
Liabilities and Income
Events that require a debit/credit entry are listed below.
Fee is received from client/group/center:
Misc fee is received from client/group/center:
Misc penalty is received from client/group/center:
Adjustment in client/group/center accounts when the last received amount is nullified.The last payment has to be broken down in the components and separate DR/CR entries must be made for each one of them.
Fee /Misc fee nullified:
Misc Penalty nullified:
Loan is disbursed:
Principal installment received:
Interest installment received:
Fee charged is received:
Penalty charged is received:
Misc fee charged is received:
Misc penalty charged is received:
Adjustment, where last payment is nullified. The last payment has to be broken down in the components and separate DR/CR entries must be made for each one of them.
Loan account is moved to Closed- Written off state
Deposit is made in voluntary/mandatory savings account:
Withdrawal is made in voluntary/mandatory savings account:
Interest is posted to the account:
Adjustment- Voluntary/Mandatory: last deposit is nullified/decreased/increased. A reverse entry of the original transaction should be made. Also, a fresh entry with the new deposit amount should be made.
Adjustment- Voluntary/Mandatory: last withdrawal is nullified/decreased/increased. A reverse entry of the original transaction should be made. Also, a fresh entry with the new withdrawal amount should be made.
Adjustment: Account balance is reduced:
Adjustment: Account balance is increased:
Adjustment: Interest earned is reduced:
Adjustment: Interest earned is increased:
Amounts entered in the system should be stored as per the decimal precision specified by MFI. Amounts should be rounded only in the specific circumstances described below. Loan disbursal amounts should not be rounded.
When the rounding of loan repayment increases 999 account balance:
When the rounding of payment decreases 999 account balance:
The following rounding rules apply to savings accounts:
When the withdrawal in savings increases the 999 account balance:
· DR Mandatory Savings account (Liabilities) 24101
· CR 999 Account (Income) 31401
When the withdrawal in savings decreases the 999 account balance:
· DR 999 Account (Income) 31401
· CR Mandatory Savings account (Liabilities) 24101
Payment of $100 for loan repayment is received by the MFI. This payment includes payment for the principal ($60), interest ($25), fee ($10) and penalty ($5). The following transaction entries are made:
System handling of merging of subcategories as long as the functionality ID of the category is not modified. Guidelines on merging will be included in the installation document. For example, for the above CoA, following merging will be supported:
Interest payable on clients' savings
Interest on mandatory savings
Interest on mandatory savings
Mandatory Savings accounts
New version of Mifos brings functionality which allows to add new, modify and remove accounts directly from the Mifos User Interface. It is possible to modify/remove only those GL Codes which were not previously used in the system. Four main categories ASSETS, LIABILITIES, INCOME and EXPENDITURE cannot be removed or modified.
Note: Initial version of Chart of Accounts xml file still needs to be added to Mifos before first start of Mifos.
There is a new page 'Manage Chart of Accounts' in Mifos Admin section:
The following operations are possible on 'Manage Chart of Accounts' page:
Add – after clicking on this link, it is possible to add a new account under selected parent account
Modify – this link allows to modify name, code and parent of account which has not been previously used in the system
Delete – by clicking on this link it is possible to remove account which has not been previously used in the system
Managing Chart of Accounts functionality has also its own permission, so it is possible to control which users can add/modify/delete accounts: