Difference between revisions of "How do I deal with company loans?"

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== Summary ==
 
== Summary ==
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This article will explain how to deal with Company Loans and how to add them to the system so that you can show the loan amount, each individual fee or charge that may incur by having a loan as well as interest on the loan. This article will also explain how to make a payment against the loan, to the point that the loan has been paid.
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This article will explain how to deal with Company Loans and how to add them to the system so that you can show the loan amount, each individual fee or charge that may incur by having the loan as well as interest on the loan. This article will also explain how to make a payment against the loan.
  
 +
== More Information ==
 +
=== Creating the Nominal Codes ===
 +
Start by creating the nominal codes for both the loan and for the associated charges and interest. Please see [[How do I create a nominal code?]] to create nominal codes.
  
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== Creating the Nominal Codes ==
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==== Loan Nominal ====
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To start, you will need to create the nominal codes for both the Bank Loan and for the bank charges and interest that will be charged. Please see [[How do I Create a Nominal Code?]] to create nominal codes and then set up the codes as follows:
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Set up the Loan nominal code as follows:
 +
* [[How do I create a nominal code?|Create]] a Nominal code with a number in the {{DataValue|19800}} region (to coincide with standard nominal code structure), giving it the {{DataPrompt|Description}} of {{DataValue|Loan Control}}.
 +
** The Loan Nominal Code will need to be set up as a {{DataPrompt|Balance Sheet Indicator}}{{DataValue|Asset/Liability}} type.
  
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=== Bank Loan Nominal ===
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==== Loan Interest/Charges Nominal ====
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Following the instruction of how to create a nominal code you will need to set-up the "Bank Loan" as follows:  
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Set up the Loan Interest/Charges as follows:
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* [[How do I Create a Nominal Code?|Create]] a Nominal code with a number 198?? (To Coincide with Standard nominal code structure), giving it the {{DataPrompt|name}} of {{DataValue|Bank Loan}}.
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* [[How do I create a nominal code?|Create]] a Nominal code with a number in the 15300 region (to coincide with standard nominal code structure), giving it the {{DataPrompt|Description}} of {{DataValue|Loan Interest/Charges}}.
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** The bank loan Nominal Code will need to be a set-up as a {{DataPrompt|Balance Sheet Indicator}} {{DataValue|Asset/Liability}} type.
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** The Loan interest/charges Nominal Code will need to be set up as a {{DataPrompt|Profit & Loss Indicator}}{{DataValue|Overhead}} type.
  
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=== Bank Interest/Charges Nominal ===
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=== Journalling the Loan ===
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Following the instruction of how to create a nominal code you will need to set-up the "Bank Interest/Charges" as follows:
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Go to {{Menu|{{NL}}|Journal Entries}}.
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* [[How do I Create a Nominal Code?|Create]] a Nominal code with a number 153?? (To Coincide with Standard nominal code structure), giving it the {{DataPrompt|name}} of {{DataValue|Loan Interest/Charges}}.
 
−
** The bank interest/charges Nominal Code will need to be a set-up as a {{DataPrompt|Profit & Loss Indicator}} {{DataValue|Overhead}} type.
 
  
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== Journalling the Bank Loan ==
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==== Loan ====
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The first step is to journal into the system the full amount of the loan. To do this, you will need to go to : "Nominal Ledger" -> "Journal Entries" -> "Double Entry".  
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The first item to enter is the total amount of the loan.
  
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=== Bank Lending Fee ===
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* At {{DataPrompt|Entry mode:}}, choose {{DataValue|Multiple}}.
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The first item that will need to be journalled is the initial Bank Charge for taking out the loan. To journal this :
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* At {{DataPrompt|Date:}}, enter the date at which the loan was taken out.
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* On the {{DataPrompt|1st Centre:}}, enter the centre for the Bank Loan Account, e.g. '''19860'''. Press {{KeyPress|Enter}}.  
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* At {{DataPrompt|Reversing?}}, choose {{DataValue|No}}.
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* On the {{DataPrompt|Date:}}, enter the date at which the Bank lending fee was charged. Press {{KeyPress|Enter}}.
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* Enter the centre for the Loan Account and enter the total amount of the loan in the Credit(-) column.
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* On the {{DataPrompt|Amount:}} enter the amount that is being charged for the fee, e.g. '''-200.00'''.
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{{Note|title=Note|text=Because you are entering the value in the {{DataPrompt|Credit(-)}} column, the figure will automatically be a negative amount, so you do not need to enter a {{DataValue|-}} sign here.}}
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* Press {{KeyPress|Enter}}.  
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* Enter a comment of {{DataValue|Total borrowed}}.
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* Enter the centre for the Current Bank account and enter the same figure as above in the Debit(+) column.
 +
* The {{DataValue|Nett}} value should show {{DataValue|Zero}}.
 +
* Press {{KeyPress|Done}} and the journal will be posted.
  
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{{Note|text=This needs to be entered as a negative figure as it is crediting the nominal account.}}
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==== Lending Fee ====
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The second item to enter is the initial charge for taking out the loan.
  
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* On the {{DataPrompt|Cheque No./Comment:}}, enter a comment of {{DataValue|Lending fee}}. Press {{KeyPress|Enter}}.
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* At {{DataPrompt|Entry mode:}}, choose {{DataValue|Multiple}}.
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* On the {{DataPrompt|2nd Centre:}}, enter in the centre for the Loan Interest/Charges, e.g. '''15319'''. Press {{KeyPress|Enter}}.  
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* At {{DataPrompt|Date:}}, enter the date at which the lending fee was charged.
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* The system will automatically enter in the opposite amount to that which was entered previously, i.e. '''200.00'''. Press {{KeyPress|Enter}}.  
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* At {{DataPrompt|Reversing?}}, choose {{DataValue|No}}.
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* Click {{Button|Accept}}.
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* Enter the centre for the Loan Account and enter the amount in the Credit(-) column.
 +
{{Note|title=Note|text=Because you are entering the value in the {{DataPrompt|Credit(-)}} column, the figure will automatically be a negative amount, so you do not need to enter a {{DataValue|-}} sign here.}}
 +
* Enter a comment of {{DataValue|Lending fee}}.
 +
* Enter the centre for the Loan Interest/Charges and enter the figure in the Debit(+) column.
 +
* The {{DataValue|Nett}} value should show {{DataValue|Zero}}.
 +
* Press {{KeyPress|Done}} and the journal will be posted.
  
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=== Bank Loan ===
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=== Journalling Any Interest/Charges ===
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The second item that will need to be journal is the amount of the loan. To journal this you will need to:
+
Each month there will be an interest charge for having the loan. This and any other charges will all get journalled in the same fashion. You will need to do this every time that a charge or interest is added.
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* On the {{DataPrompt|1st Centre:}}, enter in the centre for the Bank Loan Account, e.g. '''19860'''. Press {{KeyPress|Enter}}.
 
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* On the {{DataPrompt|Date:}}, enter the date of which the Bank loan was given.  Press {{KeyPress|Enter}}.
 
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* On the {{DataPrompt|Amount:}} enter the amount of the loan, e.g. '''-15000.00'''. Press {{KeyPress|Enter}}.  
 
  
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{{Note|text=This needs to be entered as a negative figure as it is a crediting the account.}}
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* At {{DataPrompt|Entry mode:}}, choose {{DataValue|Multiple}}.
 +
* At {{DataPrompt|Date:}}, enter the date at which the interest fee was charged.
 +
* At {{DataPrompt|Reversing?}}, choose {{DataValue|No}}.
 +
* Enter the centre for the Loan Account and enter the amount in the Credit(-) column.
 +
{{Note|title=Note|text=Because you are entering the value in the {{DataPrompt|Credit(-)}} column, the figure will automatically be a negative amount, so you do not need to enter a {{DataValue|-}} sign here.}}
 +
* Enter a comment of {{DataValue|Interest Charges}}.
 +
* Enter the centre for the Loan Interest/Charges and enter the figure in the Debit(+) column.
 +
* The {{DataValue|Nett}} value should show {{DataValue|Zero}}.
 +
* Press {{KeyPress|Done}} and the journal will be posted.
  
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* On the {{DataPrompt|Cheque No./Comment:}}, enter a comment of {{DataValue|Bank Loan}}. Press {{KeyPress|Enter}}.
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=== Journalling the Payments ===
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* On the {{DataPrompt|2nd Centre:}} enter in the centre for the Current Bank Account, e.g. '''Z992'''. Press {{KeyPress|Enter}}.
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Each month there will be a repayment against the loan that you will need to make. Again, this will be journalled into the system.
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* The system will automatically enter in the opposite amount to that which was entered previously, i.e. '''15000.00'''. Press {{KeyPress|Enter}}.
 
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* Click on {{Button|Accept}} on the screen prompt that appears.
 
  
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== Journalling Any Interest/Charges ==
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* At {{DataPrompt|Entry mode:}}, choose {{DataValue|Multiple}}.
−
Each month there will be an interest charge for having the loan. This and any other charges will all get journalled in the same fashion. You will need to do this every time that a charge or interest is added. To journal the interest/charges you will need to:
+
* At {{DataPrompt|Date:}}, enter the date of the payment.
−
* On the {{DataPrompt|1st Centre:}}, enter in the centre for the Bank Loan Account, e.g. '''19860'''.  Press {{KeyPress|Enter}}.  
+
* At {{DataPrompt|Reversing?}}, choose {{DataValue|No}}.
−
* On the {{DataPrompt|Date:}}, enter the date of the Interest Charge, or the Charges that have been added to your account.  Press {{KeyPress|Enter}}.
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* Enter the centre for the Bank Account and enter the amount in the Credit(-) column.
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* On the {{DataPrompt|Amount:}} enter the amount that is being charged for interest, e.g. '''-131.70'''. Press {{KeyPress|Enter}}.
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{{Note|title=Note|text=Because you are entering the value in the {{DataPrompt|Credit(-)}} column, the figure will automatically be a negative amount, so you do not need to enter a {{DataValue|-}} sign here.}}
 +
* Enter a comment of {{DataValue|Loan Payment}}.
 +
* Enter the centre for the Bank Loan and enter the figure in the Debit(+) column.
 +
* The {{DataValue|Nett}} value should show {{DataValue|Zero}}.
 +
* Press {{KeyPress|Done}} and the journal will be posted.
  
−
{{Note|text=This needs to be entered as a negative figure as it is a crediting the account.}}
+
You will need to continue in this fashion journalling all charges by the method described above, as well as journalling all payments made. With a number of loans, the interest charges will be variable, which is why the interest and payment journals have been split above for clarity.
  
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* On the {{DataPrompt|Cheque No./Comment:}}, enter a comment of {{DataValue|Interest Charged}}. Press {{KeyPress|Enter}}.
+
To view the amount outstanding you will need to view the Loan Control centre. This centre will come back to zero once the loan has been fully paid.
−
* On the {{DataPrompt|2nd Centre:}}, enter in the centre for the Loan Interest/Charges, e.g. '''15319'''. Press {{KeyPress|Enter}}.
 
−
* The system will automatically enter in the opposite amount to that which was entered previously, i.e. '''131.70'''.. Press {{KeyPress|Enter}}.
 
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* Click on {{Button|Accept}} on the screen prompt that appears.
 
  
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== Journalling the Payments ==
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== See also ==
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Now it is time to journal the payment into the system. To journal this you will need to:
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* [[How do I create a nominal code?]]
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* On the {{DataPrompt|1st Centre:}}, enter in the centre for the Current Bank Account Account, e.g. '''Z992'''.  Press {{KeyPress|Enter}}.
+
* [[What is a nominal code?]]
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* On the {{DataPrompt|Date:}}, enter the date of which the Bank payment has been paid.  Press {{KeyPress|Enter}}.
 
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* On the {{DataPrompt|Amount:}} enter the amount of the payment, e.g. '''-490.68'''.  Press {{KeyPress|Enter}}.
 
−
 
 
−
{{Note|text=This needs to be entered as a negative figure as it is a crediting the account.}}
 
−
 
 
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* On the {{DataPrompt|Cheque No./Comment:}}, enter a comment of {{DataValue|Loan Payment}}. Press {{KeyPress|Enter}}.
 
−
* On the {{DataPrompt|2nd Centre:}} enter in the centre for the Bank Loan, e.g. '''19860'''. Press {{KeyPress|Enter}}.
 
−
* The system will automatically enter in the opposite amount to that which was entered previously, e.g. '''490.68'''. Press {{KeyPress|Enter}}.
 
−
* Click on {{Button|Accept}}.
 
−
 
 
−
You will need to continue in this fashion journalling all charges in the method described above, as well as journalling all payments made. To view the amount outstanding you will need to view the centre of "Bank Loan". Eventually this centre will balance back to zero at the point the loan has been fully paid for.
 
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== See Also ==
 
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* [[How do I Create a Nominal Code?]]
 
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* [[What is a Nominal Code?]]
 
 
* [[How do I find a Nominal Ledger Number?]]
 
* [[How do I find a Nominal Ledger Number?]]
  
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{{KB_Tags|loan, bank, payments, company loan, interest, fee, charge, nominal ledger, ledger numbers, nominal ledger number}}
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{{KB_Tags|Loan, Bank, Payments, Company Loan, Interest, Fee, Charge, Nominal Ledger, Ledger Numbers, Nominal Ledger Number}}{{KB_NL}}{{ZN_Accounts}}
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{{How}}{{KB_NL}}{{ZN_Accounts}}

Latest revision as of 05:33, 19 June 2019

Summary

This article will explain how to deal with Company Loans and how to add them to the system so that you can show the loan amount, each individual fee or charge that may incur by having the loan as well as interest on the loan. This article will also explain how to make a payment against the loan.

More Information

Creating the Nominal Codes

Start by creating the nominal codes for both the loan and for the associated charges and interest. Please see How do I create a nominal code? to create nominal codes.

Loan Nominal

Set up the Loan nominal code as follows:

  • Create a Nominal code with a number in the '19800' region (to coincide with standard nominal code structure), giving it the "Description" of 'Loan Control'.
    • The Loan Nominal Code will need to be set up as a "Balance Sheet Indicator"'Asset/Liability' type.

Loan Interest/Charges Nominal

Set up the Loan Interest/Charges as follows:

  • Create a Nominal code with a number in the 15300 region (to coincide with standard nominal code structure), giving it the "Description" of 'Loan Interest/Charges'.
    • The Loan interest/charges Nominal Code will need to be set up as a "Profit & Loss Indicator"'Overhead' type.

Journalling the Loan

Go to " Nominal Ledger Journal Entries".

Loan

The first item to enter is the total amount of the loan.

  • At "Entry mode:", choose 'Multiple'.
  • At "Date:", enter the date at which the loan was taken out.
  • At "Reversing?", choose 'No'.
  • Enter the centre for the Loan Account and enter the total amount of the loan in the Credit(-) column.
Note: Because you are entering the value in the "Credit(-)" column, the figure will automatically be a negative amount, so you do not need to enter a '-' sign here.
  • Enter a comment of 'Total borrowed'.
  • Enter the centre for the Current Bank account and enter the same figure as above in the Debit(+) column.
  • The 'Nett' value should show 'Zero'.
  • Press <Done> and the journal will be posted.

Lending Fee

The second item to enter is the initial charge for taking out the loan.

  • At "Entry mode:", choose 'Multiple'.
  • At "Date:", enter the date at which the lending fee was charged.
  • At "Reversing?", choose 'No'.
  • Enter the centre for the Loan Account and enter the amount in the Credit(-) column.
Note: Because you are entering the value in the "Credit(-)" column, the figure will automatically be a negative amount, so you do not need to enter a '-' sign here.
  • Enter a comment of 'Lending fee'.
  • Enter the centre for the Loan Interest/Charges and enter the figure in the Debit(+) column.
  • The 'Nett' value should show 'Zero'.
  • Press <Done> and the journal will be posted.

Journalling Any Interest/Charges

Each month there will be an interest charge for having the loan. This and any other charges will all get journalled in the same fashion. You will need to do this every time that a charge or interest is added.

  • At "Entry mode:", choose 'Multiple'.
  • At "Date:", enter the date at which the interest fee was charged.
  • At "Reversing?", choose 'No'.
  • Enter the centre for the Loan Account and enter the amount in the Credit(-) column.
Note: Because you are entering the value in the "Credit(-)" column, the figure will automatically be a negative amount, so you do not need to enter a '-' sign here.
  • Enter a comment of 'Interest Charges'.
  • Enter the centre for the Loan Interest/Charges and enter the figure in the Debit(+) column.
  • The 'Nett' value should show 'Zero'.
  • Press <Done> and the journal will be posted.

Journalling the Payments

Each month there will be a repayment against the loan that you will need to make. Again, this will be journalled into the system.

  • At "Entry mode:", choose 'Multiple'.
  • At "Date:", enter the date of the payment.
  • At "Reversing?", choose 'No'.
  • Enter the centre for the Bank Account and enter the amount in the Credit(-) column.
Note: Because you are entering the value in the "Credit(-)" column, the figure will automatically be a negative amount, so you do not need to enter a '-' sign here.
  • Enter a comment of 'Loan Payment'.
  • Enter the centre for the Bank Loan and enter the figure in the Debit(+) column.
  • The 'Nett' value should show 'Zero'.
  • Press <Done> and the journal will be posted.

You will need to continue in this fashion journalling all charges by the method described above, as well as journalling all payments made. With a number of loans, the interest charges will be variable, which is why the interest and payment journals have been split above for clarity.

To view the amount outstanding you will need to view the Loan Control centre. This centre will come back to zero once the loan has been fully paid.

See also


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Keywords AND Misspellings
loan, bank, payments, company loan, interest, fee, charge, nominal ledger, ledger numbers, nominal ledger number
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