Our Company has a received a loan from our Supplier to cover the first 6 weeks of invoices. The loan is getting repaid on a weekly basis. So our bank statement is showing a withdrawel of the loan amount and now the invoice amounts due also.
Its a payment in advance which is recorded as a current liability (as per a short term loan).
As the invoices are serviced so the liability is reduced.
If there is an interest element involved in the loan ensure that such is recorded as interest and not subsumed within the sales figure.
Hope that helps,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Sorry Catherine, I avoid Sage like the plague (VT is much cuddlier accounting software)
I could work the Sage entries out if put in front of a screen but better you get an answer from someone who uses Sage on a regular basis.
What you are looking for though is along the lines of...
In the financial statements you will need to recognise an asset of the money receieved (bank) and a liability for the loan (Creditors. Current liability. Would suggest using a new nominal code for this in the 21xx range)
As invoices are issued against the loan so sales reduce the creditor liability rather than increasing money at bank.
I'll leave it to others to fill out the nominal codes.
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
