How do I deal with company loans?
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Contents
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 a loan as well as interested gain 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.
Creating the Nominal Codes
To start of with 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 follow:
Bank Loan Nominal
Following the instruction of how to create a nominal code you will need to set-up the "Bank Loan" as follows:
- Create a Nominal code with a number 198?? (To Coincide with Standard nominal code structure). Giving it the "name" of 'Bank Loan'.
- The bank loan nominal Code will need to be a set-up as a "Balance Sheet Indicator".
- Of which is an 'Asset/Liability' type.
Bank Interest/Charges Nominal
Following the instruction of how to create a nominal code you will need to set-up the "Bank Interest/Charges" as follows:
- Create a Nominal code with a number 153?? (To Coincide with Standard nominal code structure). Giving it the "name" of 'Loan Interest/Charges'.
- The bank interest/charges nominal Code will need to be a set-up as a "Profit & Loss Indicator".
- Of which is an 'Overhead' type.
Journalling the Bank Loan
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 Entry" -> "Double Entry".
Bank Lending fee
The first item that will need to be journal is the initial Bank Charge for taking out the loan. To journal this you will need to:
- On the "1st Centre:" enter in the centre for the Bank Loan Account. Press <Enter>. e.g. 19860.
- On the "Date:" enter the date of which that the Bank lending fee was charged. Press <Enter>.
- On the "Amount:" enter the amount that is being charged for the fee. Press <Enter>.
 | This needs to be entered as a positive figure as it is a debiting the account. |
- On the "Cheque No./Comment:" enter a comment of 'Lending fee'. Press <Enter>.
- On the "2nd Centre:" enter in the centre for the Loan Interest/Charges. Press <Enter>. e.g. 15319
- The system will automatically enter in the opposite amount to that which was entered prior.
See Also
