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Long Term Loans And Cash Flow Reporting

When a cash flow report is created it will bring together transactions from ALL your bank accounts. If you do a Bank Transfer there will be no change to your cash flow. However, some people may want to see how the repayments of loans will affect their Current account balance only.

Thought needs to be put into whether you want to set the loan up as a BANK account or a NOMINAL.

  1. BANK ACCOUNT. Set up a new bank account (Bank/New) and ensure bank transfers are entered when payments are made from the current account. When you get statements for the loan account you can then enter a Bank Payment for the interest simply by changing the bank account number. In this case set up loans as a Liability Nominal.
     
  2. NOMINAL. Set up a new nominal within the Liabilities group (Nominal/New). When you receive money in to your current account (usual off-setting a capital purchase) post the Bank Receipt to this new nominal. As repayments are made (from the current account) you can post them to this nominal each month on a normal bank payment.

    If interest is incurred separately then you will need to enter a journal. This will be between the new liability loan nominal and bank interest paid.  Otherwise loan accounts can be set up as a bank account and be shown at the end of the cash flow report as a balance