Hong Kong lending operations guide · Free reconciliation checklist
Loan billing and repayment operations
Origination gets the attention, but a lending book is judged after disbursement. Billing runs, instalment schedules, interest accrual, payment capture and reconciliation are where a portfolio either reconciles to the cent or quietly drifts.
Core definitions
Put similar concepts in the right place
Each component solves a different problem. Complete lending operations depend on clear data and workflow hand-offs.
| Item | What it does in practice |
|---|---|
| 01Schedule and accrual | The instalment schedule and the interest method are properties of the loan, not of a spreadsheet. Flat, reducing-balance and per-diem accrual produce different numbers from the same principal. |
| 02Billing run | Raising the period’s instalments as a repeatable job with a record of what was raised, when, for which loans, and what was skipped and why. |
| 03Payment capture and allocation | Receipts arrive by transfer, autopay, card or counter. Allocation across principal, interest, fees and arrears follows a stated order rather than staff judgement. |
| 04Reconciliation | Bank movement matched against expected receipts, with unmatched items surfaced as work rather than left to accumulate in a spreadsheet. |
Workflow
What a billing and repayment cycle has to do
- 01
Derive the schedule at disbursement
Fix the instalment dates, amounts and interest method from the approved terms, so the schedule is traceable to what the borrower signed.
- 02
Accrue and raise
Run the period’s accrual and raise instalments as a job that can be re-run, reviewed and explained.
- 03
Capture receipts
Record payments from every channel against the loan, with the value date that matters for interest rather than the date somebody typed it in.
- 04
Allocate consistently
Apply each receipt across principal, interest, fees and arrears in the stated order, and record any manual override with a reason.
- 05
Reconcile
Match bank movement to expected receipts, and turn every unmatched item into an owned exception with a deadline.
- 06
Handle arrears and fees
Age the shortfall, apply fees under policy, and keep the notice history on the loan where a reviewer can find it.
- 07
Settle and close
Produce a settlement figure, apply the final receipt and close the loan so the record still reconstructs years later.
Printable worksheet
Free: 14-point billing and reconciliation checklist
Check each item. Fewer than ten checks suggests the book cannot be reconciled without manual work. This is an operational self-assessment, not accounting or legal advice.
Practical evaluation
Three things that break a repayment book
Interest method by convention
When the accrual method lives in a spreadsheet formula rather than on the loan, two staff produce two different settlement figures for the same borrower, and neither can show why.
Allocation left to judgement
If the order across principal, interest, fees and arrears is not stated, the same receipt lands differently depending on who posted it, and the arrears position stops meaning anything.
Reconciliation as a month-end scramble
Unmatched receipts that accumulate for a month become a research project. Treated as daily exceptions with owners, they stay small.
Frequently asked questions
Quick answers
What is loan billing software?
It generates the instalment schedule, accrues interest under the agreed method, raises each instalment, captures and allocates payments, applies fees and reconciles receipts against the ledger. It is the servicing half of a lending system, distinct from origination.
Does Covenant Desk move money or hold client funds?
No. Covenant Desk records what was billed, what was received and how it was allocated. Payment collection and settlement happen through the lender’s own banking and payment arrangements.
How is Hong Kong interest handled?
The interest a licensed money lender may charge is capped by the Money Lenders Ordinance. The platform records the method and rate the lender has set for each product and computes from that; the rate itself, and its lawfulness, stay the lender’s responsibility.
Can it reconcile against a bank statement?
Yes, by matching recorded receipts against imported bank movement and surfacing what does not match as an exception with an owner, rather than reporting a total that happens to agree.
Primary sources
Official sources and editorial note
This guide reflects official material available on the review date. Requirements can change; each institution should check the latest licence conditions and obtain legal or compliance advice. This page is not legal advice. Read our editorial and corrections policy.
Next step
Bill, collect, allocate and reconcile on the same record as the loan.
Try Covenant Desk to see instalment schedules, billing runs, payment allocation, arrears ageing and reconciliation working against one borrower record.
Covenant Desk is lending operations software. It does not provide loans, issue credit reports or replace the lender’s final credit decision.