Recording a Loan Given

[Naz_Haque]

My company has provided a small loan to another company.

How do I record this on Quickfile?

Interest will be paid to my company in one lump sum with the loan sum in three years.
Again, how would I record that event too?

Thanks in advance for your help.

[ian_roberts]

1. Create a new bank account to represent the loan
2. Tag the payment of the loan to the other company as a bank transfer from your current account to the loan account
3. Each time you charge interest, add that as a money in transaction on the loan account, tagged as “something not on the list” to a suitable income code (misc income, or you may prefer to create a specific code just for the interest)
4. When the other company pays you back, that is a transfer from the loan account to your current account

For number 3, check with your accountant on whether you’re better adding the interest charges incrementally month on month or year on year (so the income is amortised across the three year term) or just in one go at the end (so the income all counts in one year).

[QFSteve]

Hello @Naz_Haque

There are a few ways to record a loan to a 3rd party.

Fore example, one way is to just set up a merchant bank account, transfer money to it (you giving them the money in principle) then record bank transfers back each month as it is repaid.

As there are other implications to consider I would reccomend consulting your accountant for professional tailored advice. Please be aware the support team are not registered accountants.