SAP HCM – Company Loans

End-User Training Manual

Prepared by:
Eslam Hosny (SAP Lead Consultant)

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Contents
Overview.......................................................................................................................................... 3
Master Data - Loans Info Type (0045) ............................................................................................. 3
Loan Identification....................................................................................................................... 4
Basic Data .................................................................................................................................... 5
Conditions.................................................................................................................................... 6
Payments ..................................................................................................................................... 7
Create Repayment Plan ............................................................................................................... 8
Edit Loans .................................................................................................................................... 9
Creating Special Repayments .................................................................................................. 9
Changing the Interest Rate or Repayment Installment from specific validity start ................ 9
Processing Loans for an Employee Who Changes Company Code ....................................... 10
Making Loan Inactive for specific Period............................................................................... 10
Processing Loans for an Employee Who Leaves.................................................................... 11
Deleting Loans ....................................................................................................................... 11
Loan Wage Types........................................................................................................................... 11

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 Overview

- Company Loans are loans received by the employee from the company for a specific
purpose, for example, to buy a car.

- The employee has the advantage of receiving the loan and then paying it back in
regular installments at either a lower rate of interest or without having to pay any
interest.

- Loan repayment is automatically processed in Payroll Accounting withheld from the

employee’s salary.

- HR Master Data for company loans is stored in Info Type (0045 - Loans)

Master Data - Loans Info Type (0045)

- Validity period of the loan (From - To date)

- The Loan Type is used to specify the purpose of loans.

- The Loan Types are stored as subtypes in the Loans info type 0045.

For Example:

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 Loan Identification

- Every loan that you create gets a sequential number.

- The combination of loan type and sequential number makes is possible for the system
to uniquely identify every loan.

- This makes it possible for you to create several loans of the same type for an employee.

Notes:
- In case creating new info type record, the system proposes the next available
sequential number for the new info type record.

- In case copying the existing info type record to change the repayment installment
for an existing loan for example, the system proposes the sequential number of the
info type record that has been copied for the new info type record.

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Basic Data

- Approval Date:
o You can only specify a date in this field that comes before the start of validity
date or corresponds to it.
- Loan Amount Granted:
o The Approved amount
- Loan Amount Paid:
o Displays the total of loan payments paid to the employee up until now.
o This field is used for display purposes & updated when the payroll is run.
- Loan Balance:
o Balance after last payroll run (The employee still owes this amount to the
enterprise)
o This field is used for display purposes & updated when the payroll is run.
- End of Loan:
o Expected End Date of Loan as it may be changed when you make changes to
the master data of an existing loan.

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Conditions

- Loan Conditions:
o The conditions for the calculation of interest and repayment for a certain
loan type (Maintained in System Configuration)
- Individual Interest Rate:
o Interest rate that you want to grant the employee on an individual basis for
his/her loan.
o The system uses this value as opposed to the debit interest rate (Loan
Conditions)
- Repayment Start:
o The date of which the employee must pay the specified repayment
installment.
- Repayment Installment
o Amount that the employee should regularly pay to repay the loan.
o In addition to this amount, the interest incurs as debit (If Available)
o You can calculate the monthly installment through the validity dates.

o You can calculate the Loan End Date through the monthly installment.

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Payments

- You enter all the payments that are made by your company or employee.
- Subsequent changes to payments that have already been settled trigger retroactive
accounting in Payroll.
- The approval of a loan does not automatically lead to payment, you must create the
loan payment explicitly in this step.

Example of Payments:

- Payment Type: Loan payment (External):

o You want to pay the employee the total approved amount of the loan or part
of this by check or bank transfer.
o You can pay a maximum of the approved amount to the employee.
o You can also issue the approved amount in several partial amounts.
- Payment Type: Loan Payment (Payroll): You want to pay the employee the total
approved amount of the loan or part of this as a payment in his Salary.
- Payment Type: Special Repayment (External):
o The employee makes an unscheduled repayment by check or bank transfer.
- Payment Type: Special Repayment (Payroll):
o The employee makes an unscheduled repayment that should be withheld
from his/her salary.
- Payment Type: Complete Repayment:
o The employee repays the total outstanding amount of the loan by check or
bank transfer.

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Create Repayment Plan

- The repayment plan for a loan is used to obtain detailed information on the term of
the loan and the charge to the employee.

- You can specify several values for the loan and create the repayment plan several
times if required to check what effects your entries have. If the repayment plan is as
you expected, save your entries in the info type record.

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Edit Loans

Creating Special Repayments

(Changing the Loan Record):

o You can create special repayment (Payroll or External) in Payments TAB while
creating the loan or later by changing the existing loan record.
o The system will propose the outstanding loan balance amount as the
repayment amount.

Changing the Interest Rate or Repayment Installment from specific validity start

(Copying the corresponding Loan Record from specific validity start):

o Retroactive may be occurred.

o The loan amount and approval date are fixed elements of a loan. These
values must remain constant in all the loan info type records. For this reason,
you cannot change these entries later.
o The Sequential Number will be the same for the loan Records (Same Loan
Not New Loan)

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Processing Loans for an Employee Who Changes Company Code

(Delimit the corresponding record of the Loans):

o Delimit the corresponding record of the Loans info type (0045) to the date of
the change of company code.
o Close the employee’s loan with a Payment Type (Complete Repayment)
o If payments exist that are due after the date of the change of company code,
delete them so that a new loan for the employee can be created.
o Create a new loan for the employee from the point in time that he belongs to
the new company code.
o Create a payment of the remaining balance with the Loan Balance
Transfer payment type.
o If required, create payments again that were deleted for the old company
code.
o From FI Side, the remaining balance will be transferred from the old
company to the new one.

Making Loan Inactive for specific Period

(Copying the corresponding Loan Record):

o Copy the existing record of the Loans info type (0045).

o For the validity start and end dates of the new info type record, enter the
period in which the repayment of the loan is to be inactive.
o Enter 0 as the repayment installment of the new info type.
o The Sequential Number will be the same for the loan Records (Same Loan
Not New Loan)

After you have made the changes, the following info type records exist for the loan:
o Record 1: from the validity start date to the date from which repayment should
become inactive.
o Record 2: from the date on which repayment should become inactive to the date
from which repayment should recommence.
o Record 3: from the date on which repayments should start again to the validity
end date.

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Processing Loans for an Employee Who Leaves

(Changing the Loan Record):

o If the employee leaves with a company loan, you must make sure that he/she
has completely repaid the loan.
o After the employee has left, payroll is no longer performed for him/her,
which means that repayment cannot take place via payroll.
o Any outstanding debts must be settled in Financial Accounting.
o So, you must close the loan with a special repayment or complete repayment
before the employee leaves.

Deleting Loans
o You can delete a loan that you have created accidentally for the wrong
employee.
o You can delete the loan directly that has been created with no payment.
o You can delete the loan that has been created with payment and not
processed in payroll, then you must delete first the payment in the payment
Tab Then delete the loan record.
o You cannot delete loans that have been paid back completely or has not
repaid it completely.

Loan Wage Types

- In Payroll, loan wage types start with /Lnn in most of the countries that use
the Loans component, the following wage types are used:
o /LOE (External loan payment)
o /LRP (Regular Repayment)
o /LEP (Special payroll repayment)
o /LEE (Special repayment, external)
o /LEX (Complete Repayment)
o /LLB (Loan Balance)
- You can also create your customer wage types for each Loan Type that holds the
payments of the employee.

Note: Additional country-specific functions and loan wage types are also used in some
countries.

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