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This Module is for financing for e.g. a vehicle loan. To calculate payments, amount outstanding and interest charged.
Go to Ledger > Extra and select Loan
Create GL Accounts required (if not already created). Account Setup. For this exercise we will pretend to have acquired vehicle financing.
•Car Loan Nedbank, the Account type is Liability Long term, and Default Vat is Not applicable
•Interest on Loan, the Account type is Operating Expenses, and Default Vat is Not applicable
•Standard bank, Account from which payment is made,Account type is Bank, Default Vat is Not applicable
•Bank costs, Account type is expenses operating, Default Vat is Input Tax.
How to use the loan Function
Go to Ledger select the extra tab and on the dropdown select Loan. Then select New Loan.
Complete the following fields:( Loan No. automatically generated by Smart IT)
•Begin Date - date upon which the finance amount was received
•Interest Rate per Year - percentage as per the loan agreement
•Loan Term in months - loan duration as per the loan agreement
•Fees Incl - monthly fees inclusive as charged by the bank
•Fees Tax - ( this is optional) usually Input tax
•Loan Account, Interest Account, Fee Account and Payment Account - GL accounts as created in step 1
•Description - What finance was obtained for
•For your first Entry (Principal Debt) select the same date as the begin date
•Input the Principal Amount (Total amount of the loan agreement, including fees, interest etc)
•Then save. The system now has all information required.
Making a payment
Return to your loan module, select the loan you are doing payment for (by double clicking, the form will be opened)
•In the Add entry section - select the payment date and process
•The payment total consists of interest fees and principal.
The following journals will be automatically created.