Hi everyone, I want to create a new party which is a creditor parties, but when I go to “Party Type List” there isn’t any button to make a new party. Anyone know how to make a new party?
You mean “customers”
I think creditors is suppliers, if you search for supplier in search bar and create them, you should be able to view them in creditors
Nope @LifeP, creditor is right. I think it is different between supplier and creditor since creditor is lending money to me @Pawan . I want to make sure that I’m input the right journal for the right parties.
For Lender, the best is to create Ledger Account with name of lender under the COA. And to pass the entries, use journal entry, select the account of lender and post the entries.
IMHO, using lenders as party type and putting it into creditor is not right approach.
I think the principle is the same. The creditor party will be connect to account payable. In my opinion it would be easier to track all the transaction (what we have paid) from the party list than from general ledger. And it is easier since we don’t have to make a new account.
No! from the accounting standards perspective, Lender and Creditors (Supplier) is not the same, unless you are in the business of banking or money lending. The Lender falls part of Secured Loan or Unsecured Loan in Balance Sheet and Creditor falls parts of Current Liability.
If you say it does not matter where the classification is shown in Balance Sheet and everything ultimately comes on liability side. Then, i don’t have anything more to add in this discussion.
Sorry, what I mean by the same is on the liability position and it is can be categorize as AR (in my company). Just like you say it is can be differentiate as a loan to third parties, but again the issue is not on the account but on the parties. Even if I make a new account with name “loan to third parties”, I still need to write to whom I was loan the money from. And from my perspective it is better to make one account loan to third parties and select every loan to respectively parties. And thanks about sharing your opinion @FinForce.