Recording loan receivables (a debt to an entity)
There are several possibilities for recording loans in the accounting system, only one of which must be selected. If a loan is recorded manually or an incoming/outgoing payment is added manually, followed by importing a bank account statement, then the respective incoming/outgoing payment row must be deleted (otherwise, the incoming/outgoing payment of a loan is added twice).
The first option is to record loans with an entry.
In order to add a loan receivable, go to Accounting > Entries.
Loan receivables should be recorded based on whether these are current (up to 1 year) or non-current (over 1 year).
Current loans can be recorded with the following entry:
D 1410 Loan receivables
C 1020 Bank account /1010 Cash
For calculating various loans, dimensions can be added to account 1410 if necessary (Settings > Chart of accounts settings > Sub-accounts or dimensions > Add new sub-account)
Non-current loans can be recorded with the following entry:
D 1760 Miscellaneous long-term receivables
C 1020 Bank account / 1020 Cash
For calculating various loans, dimensions can be added to account 1760 if necessary (Settings > Chart of accounts settings > Sub-accounts or dimensions > Add new sub-account)
The second possibility for recording an issued loan is to import a bank account statement– when a bank account statement is uploaded, an automatic entry for the outgoing payment is made; however, it is unreconciled and must be reconciled manually. For this purpose, open the Outgoing Payment tab and click on the ‘View’ button at the end of the unreconciled outgoing payment row. A window opens that displays information about the incoming payments and links of payments with sales invoices and accounts.
When selecting repayment for a loan, enter the received principal sum of the loan in the ‘Sum’ field on the left; then pick a suitable account for recording the loan in the right field. In order to confirm that the incoming payment is reconciled, the user must click on ‘Save and confirm’. This creates respective entries (D receivables account and C bank or cash).
A third option is to add an incoming payment manually– for this, click on ‘Add manually’, fill in the transaction data and save the incoming payment. When saving, an outgoing payment window opens that displays information about the outgoing payment and links of payments with purchase invoices and accounts.
When selecting repayment for a loan, enter the received principal sum of the loan in the ‘Sum’ field on the left; then pick a suitable account for recording the loan in the right field. In order to confirm that the incoming payment is reconciled, the user must click on ‘Save and confirm’. This creates respective entries (D receivables account and C bank or cash).
If the loan is non-current (duration of the loan exceeds one year), the part that is going to be repaid during the following year must be entered from the non-current loan receivables account to the current loan receivables account with the following entry:
D 1410 Loan receivables (amount for the following year)
C 1760 Miscellaneous long-term receivables (amount for the following year)
Recording repayments for loan receivables (entity receives money)
For recording repayments of loan receivables, there are several possibilities, only one of which must be selected. If a loan repayment for a loan receivable is added manually or an incoming payment is added manually in the Incoming/Outgoing Payment module, followed by importing a bank account statement, then the respective incoming payment row must be deleted (otherwise, the incoming payment for a loan is added twice). If the incoming payment includes interest, then this must be recorded separately in the incoming payment entry.
The first option is to add an entry about an incoming payment for a loan.
In order to add an incoming payment entry, go to Accounting > Entries.
D 1020 Bank account /1010 Cash
C 1410 Loan receivables
C suitable account for interest income (8400, 8401, 8402 or 8409)
The second possibility for recording a repayment of a loan is to import a bank account statement– when a bank account statement is uploaded, an automatic entry for the incoming payment is made; however, it is unreconciled and must be reconciled manually. For this purpose, open the Incoming Payment tab and click on the ‘View’ button at the end of the unreconciled incoming payment row. The window that opens displays information about the incoming payments and links of payments with sales invoices and accounts. If a loan repayment covers the principal amount, as well as interest, then these must be recorded on separate rows in the incoming payment entry.
When selecting a received instalment for loan, enter the received principal sum of the loan in the ‘Sum’ field on the left; then pick a suitable account for recording the loan repayment in the right field. In order to add a new row, click on the ‘Add row’ button and select a suitable account for the interest income (e.g. 8400, 8401, 8402 or 8409). In order to confirm that the incoming payment is reconciled, the user must click on ‘Save and confirm’. This prepares the respective entries (D bank or cash, C loan receivables and C interest income account).
After confirming the incoming payment, a window opens displaying that the loan and interest repayment is confirmed and the amount of money on a bank account / in cash / on an account of a reporting person has increased. In this window, it is possible to void the incoming payment or return to the list of incoming payments.
The third option is to add an incoming payment manually– for this, click on ‘Add manually’ in the Incoming/Outgoing Payments module, fill in the transaction data and save the incoming payment. After saving, the incoming payment is displayed in a window with information about the incoming payment and relations of the payment with sales invoices and accounts.
When receiving a loan repayment, enter the sum of the loan repayment in the ‘Sum’ field on the left, and select a suitable account for repaying the loan from the right field. In order to add a new row, click on the ‘Add row’ button and select a suitable account for the interest income (e.g. 8400, 8401, 8402 or 8409). In order to confirm that the incoming payment is reconciled, user must click on ‘Save and confirm’. This prepares respective entries (D bank or cash, C loan receivables and C interest income account).
After confirming the incoming payment, a window opens displaying that the loan and interest repayment is confirmed and the amount of money on a bank account / in cash / on an account of a reporting person has increased. In this window, it is possible to void the incoming payment or return to the list of incoming payments.