Accounting Integration in Mifos


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Mifos is an open source information management system (MIS) purpose-built for the microfinance industry to help them more efficiently and effectively deliver financial services to the poor.

This presentation outlines the flexible data export options in Mifos that allow the MFI to import the necessary transactions and general ledger data to successfully integrate Mifos with their accounting system.

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  • Accounting Integration in Mifos

    1. 1. UNLOCKING THE POTENTIAL OF MICROFINANCE Accounting Integration in Mifos
    2. 2. Accounting Set-Up <ul><li>During Mifos configuration, enter your chart of accounts into Mifos to include all portfolio-related GL Codes </li></ul><ul><li>During product set-up, configure GL Codes for each product’s transaction type (Loan disbursals, loan repayments, savings deposits, etc) </li></ul><ul><li>Mifos records GL entries for each transaction and can be viewed on the Transaction History page </li></ul>Configurable in Mifos Each transaction row has GL Code, Date of transaction, debit/credit amounts
    3. 3. <ul><li>Flexible Export options from Mifos: </li></ul><ul><ul><li>Export support for all financial transactions types: </li></ul></ul><ul><ul><ul><li>Loan disbursals, principal, interest and fee repayments </li></ul></ul></ul><ul><ul><ul><li>Client, Group, and Center Fees </li></ul></ul></ul><ul><ul><ul><li>Savings deposits, withdrawals, and interest postings </li></ul></ul></ul><ul><ul><li>Can be any level of detail and in variety of formats </li></ul></ul><ul><ul><ul><li>Sliced/diced by branch, loan product, transaction type, date </li></ul></ul></ul><ul><ul><ul><li>Summarized to General Ledger level </li></ul></ul></ul><ul><ul><ul><li>Typical formats: Report or CSV </li></ul></ul></ul><ul><ul><li>Export run daily in Mifos (either at Head or Branch Office) </li></ul></ul><ul><li>Flexible Import options to Accounting System </li></ul><ul><ul><li>Data imported or manually entered into accounting system </li></ul></ul><ul><ul><li>Certain formats can be directly imported, depending on which accounting software is chosen </li></ul></ul><ul><ul><li>Examples : </li></ul></ul><ul><ul><ul><li>Pastel – CSV can be formatted to a Pastel template and then imported </li></ul></ul></ul><ul><ul><ul><li>QuickBooks – IIF format (tab-delimited file) imported directly into QuickBooks </li></ul></ul></ul>Integration of Mifos and Accounting Software
    4. 4. Accounting Integration: Example #1 (SECDEP) Daily export of summarized Mifos transactions Import or manually enter into accounting system Basic integration with Mifos MIFOS MIS Platform Accounting System
    5. 5. Example 1: Basic Integration <ul><li>General Ledger report run EOD everyday </li></ul><ul><li>Summation of all transactions at Head Office </li></ul><ul><li>Data then manually entered into Accounting system </li></ul>
    6. 6. Accounting Integration: Example #2 (Jitegemea) Basic integration, plus reconciliation with bank accounts Daily export of Mifos transactions summarized at center level Import transaction data by center Enter bank statements with deposit slip amounts Reconcile deposit slips with Mifos data, and transfer to respective GL accounts MIFOS MIS Platform Bank Accounts Accounting System
    7. 7. <ul><li>Data from Mifos is reconciled with bank data to ensure imported numbers match </li></ul><ul><li>Bank statements with deposit slip amounts are entered into Accounting system </li></ul><ul><li>Then, daily Mifos export files are imported </li></ul>Example #2: Financial Reconciliation <ul><li>After imported data from Mifos is accepted, all Mifos receipts are reconciled with banking deposit slips and the sums in the Bank Control account are transferred into respective GL accounts </li></ul><ul><li>Example: </li></ul>19,500 (2) Import file from Mifos Loan installments 500 Collected interest 50 Collected savings 100 320  deposit slip  (1) 330  deposit slip  (1) Bank Control Account (3)    500 20,000  Recorded when loan check is issued Principal Receivable
    8. 8. Accounting Integration: Example #3 (ENDA) Integrations with both cash management and accounting systems Daily export of Mifos transactions by branch and product type Import or manually enter into accounting system Validation for Mifos transactions, and other reports related to other expenses CSV of Mifos transactions at individual transaction level MIFOS MIS Platform Accounting System Cash Management System
    9. 9. Example #3 – Detailed Reports <ul><li>Report is run for each branch and each loan product </li></ul><ul><li>Contains report date, loan amount disbursed and amounts paid (principal, interest, different fee types, etc) </li></ul>
    10. 10. <ul><li>Loan portfolio data can be extracted from Mifos and combined with data from Accounting for Operational Reporting (SEEP, etc) </li></ul><ul><li>Examples of Metrics (information from Mifos in red / Accounting in blue) </li></ul><ul><ul><li>Operating Expense Ratio = Operating Expense / Average Gross Loan Portfolio </li></ul></ul><ul><ul><li>Cost Per Active Client = Operating Expense / Average Number of Active Clients </li></ul></ul><ul><ul><li>Average Loan Disbursed = Value of Loan Disbursed / Number of Loans Disbursed </li></ul></ul><ul><ul><li>Portfolio at Risk (PAR) Ratio = PAR > 30 Days +Value of Renegotiated Loans / Gross Loan Portfolio </li></ul></ul><ul><ul><li>Risk Coverage Ratio = Impairment Loss Allowance / Portfolio at Risk > 30 days + Value of Renegotiated Loans </li></ul></ul>Operational Reporting
    11. 11. <ul><li>Mifos </li></ul><ul><li>Loan Portfolio Report </li></ul><ul><ul><li>Portfolio Quality </li></ul></ul><ul><li>Productivity Ratios </li></ul><ul><ul><li>Number of Active Loans per Loan Officer </li></ul></ul><ul><li>Accounting </li></ul><ul><li>Balance Sheet </li></ul><ul><li>Income Statement </li></ul><ul><li>Cash Flow Statement </li></ul><ul><li>Return on Investment (ROI) </li></ul>Operational Reporting Examples of Reports Mifos and Accounting <ul><li>Operational Data </li></ul><ul><li>Donor Reports </li></ul><ul><ul><li>Profitability and Portfolio Quality </li></ul></ul><ul><li>Management Reports </li></ul><ul><ul><li>Efficient and Productivity Ratios and Asset/Liability Management </li></ul></ul>
    12. 12. <ul><li>Examples of Ratios </li></ul>Operational Reporting
    13. 13. <ul><li>Examples of Graphs </li></ul><ul><li>Average Loan Disbursed, Operating Expense Ratio, etc </li></ul>Operational Reporting