Hi, I’m new to Quickfile, but getting the hang of it! We have had to purchase a van for our business and have taken out a finance loan to pay for it. I’m not sure how to post the original loan and also the monthly repayments as they are obviously partially interest payments and capital. Any suggestions gratefully received.
What sort of finance loan was it and are you VAT registered? I know for example for my lease purchase payments just get processed as per any other monthly outgoing.
Yes we are VAT registered. I just want to put it in the right codes, as I assume the van must be an asset.
So the loan was just a loan and you bought the van outright? You would treat these as 2 separate things, the van just gets logged as a purchase and goes under assets and the loan would just get added to your banking list.
You would just tag the repayments on that loan as you would any other payment but then you would also add entries for the interest which you would most likely post to a nominal relevant to that interest payment. It’s probably best to speak to your accountant to see exactly how they would want the capital/interest accounting for.
Thanks for your help - just need to link up with an accountant now.
Hi @joannaleah
If you’re looking for an accountant, this may be a good place to start: https://accountants.quickfile.co.uk
The treatment of both the loan and the repayments will depend on what type of loan it is. Did you take out a a bank loan and use that to purchase the van? Or is it a finance agreement which you pay off monthly?
If it’s a finance agreement, do you own the van at the end of the agreement - either outright or with an option to purchase - or does it go back to the dealer and you start again?