Using Dimensions to manage Loans you do not need to amend your Chart of Accounts when you take out a new loan, you can do this using Dimensions Tags
Adding the Bank or Hire Purchase Dimension Tag
Before entering a Bank Loan or a Hire Purchase Loan you need to add a new Loan Dimension Tag
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Navigate to ‘Configuration -> DIMENSIONS’ and click on ‘Loan’
You will see a list of existing loans and click on this [New] button. (Do NOT click on the [New] button at the top right of the screen).
You can then enter the name of the Loan:
Name: Enter the name of the loan
Company: Enter the Company this applies to
Start Date: the date the loan is taken out
End Date: the date the loan is due
Click [Save] to save the Loan Dimension Tag.
Entering a New Bank Loan
Once you have added the New Loan Dimension Tag you can add the Loan details in a Ledger Entry
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Ledger Entry Header
Navigate to ‘Ledger -> LEDGER ENTRIES’ and click [New]
Date: the date to loan was paid into your bank
Comment: Add details of the loan
Click [Save] to complete editing the Ledger Entry Header
Ledger Entry Line Items
The Ledger Items Entry Grid is now displayed. (Click on the Pencil to edit the grid at a later stage)
Click on the
Enter lines (you click the :
Credit ‘2101 Short Term Loans’ entering the loan name in the ‘LOANS’ column
Credit ‘2301 Long Term Loans’entering the loan name in the ‘LOANS’ column
Debit Debit ‘1200 Bank Account’ entering the bank account name in the ‘BANK ACCOUNT’ column
NB: The new Bank Rec means this will need some modification…
Entering a New Hire Purchase Loan
Once you have added the New Loan Dimension Tag you can add the Hire Purchase details as a Ledger Entry allowing for VAT and Hire Purchase Fees:
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Ledger Entry Header
Navigate to ‘Ledger -> LEDGER ENTRIES’ and click [New]
Date: the date of the Hire Purchase agreement
Comment: Add details of the hire purchase
Click [Save] to complete editing the Ledger Entry Header
Ledger Entry Line Items
The Ledger Items Entry Grid is now displayed. (Click on the Pencil to edit the grid at a later stage)
Credit 2310 Hire Purchase with the total amount you will owe (Net + VAT + Fees) entering the loan name in the ‘LOANS’ column
Debit 2201 Purchase Tax Control Account the VAT amount
Debit 0050 Motor Vehicles (or similar asset account) for the net amount you paid for the asses excluding fees and VAT
Debit 7901 Bank Charges for the Hire Purchase Fees
Click [Save]
Tax Treatment
You now have to enter the Tax Treatment to ensure the VAT appears in your VAT Submission:
First click on the Pencil next to ‘Draft’ enter editing mode:
Tick the Draft check box and [Save].This enables you to edit the Ledger Entry.
Then click to add a New Tax Treatment:
Enter the following values:
Foreign Net Amount – the net amount you paid for the asses excluding fees and VAT
Foreign Tax Amount – the VAT
Net Amount – the net amount you paid for the asses excluding fees and VAT
Tax Amount – the VAT
Tax Rate – ‘UK Purchase Goods Standard
Tax Rate Tag – GB.Input_GB.StandardGB.VAT
Click [Save]
Finally click on the Pencil to untick the ‘Draft’ check box.
Loan Repayment
The Loan Report
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At the end-of-year your accountant will want details of the loan outstanding and and loan repayments. You can get this using the ‘Loan Analysis’ Report.
You can get to this by going to ‘Financial Reports’ and clicking on [Other Reports] where you can search for the report by name after choosing the ‘All Reports’ folder
Alternatively go to ‘Purchases – REPORTS’ subtab where you can see the ‘Loan Analysis’ report
icon and add the Column ‘Loan’ and the ‘Bank Account’
icon to add lines):
to
