Record a Loan and Repayment

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Step 1: Set up a liability account to record what you owe

First, set up a liability account to record the loan:

  1. Select Company > Finance > Chart of Accounts.
  2. Select ‘+ Create’ to create a new account.
  3. From the Account Type ▼ dropdown menu, select ‘Long Term Liabilities’. Note: If you plan to pay off the loan by the end of the current fiscal year, select ‘Other Current Liabilities’ instead.
  4. Give the account a relevant name, like "Loan for a car" or "Covid-19 relief loan."
  5. Select ‘Create’ and close.

 

Step 2: Record the money you got from the loan

Now you have an account to track what you owe for the loan.

Record your loan money directly into your bank account

Follow these steps to record the money with create a journal entry:

  1. Go to the Banking module and select the bank account to which you received the loan.
  2. Click the ‘Transactions’ tab and then ‘+ Add Transaction’ 
  3. Under the Money In section, select ‘Deposit from Other Accounts’
  4. Transaction for bank transfer
  5. Enter the Date, Amount, and other relevant details.
  6. Select the From Account as the Loan account you had created.
  7. Click ‘Create’.

Important: If you put the money into an account that's connected to online banking, Zipi also downloads the transaction after you send the money to your bank. Match the downloaded transaction to this journal entry when you review your downloaded transactions.

Note: This puts the entire loan amount into your bank account. Whenever you record expenses or purchases, you can select your bank account as the payment account.

Note 2: If you plan to use your loan in a different way (meaning you did not put the money directly into a bank account), for Example, like making a direct purchase. Then we suggest that you reach out to your accountant. This can get tricky and they know how to handle the next steps. Don't have an accountant? Zipi can help you find one.

 

Step 3: Record a loan repayment

When you're ready to pay back the loan, follow these steps to record each repayment.

  1. Go to Purchases > Expenses > + Create
  2. Select the Expense Account as the Loan account you had created.
  3. Enter the Date, Amount, Paid Through Account and other relevant details.

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