Writing off a Loan in DDI Connect

How do I write off a loan in DDI-Connect?

There is no one specific method that you are required to use. The process will depend entirely on how your organization opts to handle loan write-offs.

• First, you must reduce the balance of the loan to 0, as DDI-Connect will not allow you to change the status of the loan to closed until the balance is zero. You can reduce the balance one of two ways:
  • Perform a financial adjustment against the loan to reduce the amount to 0
  • Issue a check for the balance of the loan (from your organization to the loan)

• Next, you'll perform a general journal entry and journal a debit to a liability account used for loan losses & a credit to an asset account used to track reserve for loans charged off

• If a recovery check is received, the funds would be credited/debited back to the accounts affected in the above step

Once these steps have been performed, you can change the status of the loan to closed.