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Recording Loan and Repayments


#1

I am not an accountant hence my choice of ERPNext and need help in keep track of my loans and repayments. How do I record a loan and how do I record the monthly payments so loan liability reduces with each payment.


#2

ERPNext does not have a “loan” document type at this time. This means you will have to manually track the loan on a spreadsheet. This is not hard to do as there are many loan amortization templates out there you can use for tracking purposes. The rest will need to be done manually in ERPNext with Journal Entries

You will need to setup a supplier that the loan originates from. I built a custom supplier type and called it unsecured loans for my purposes.

The first entry is when you get the $$ from the lender. The debit side is the “increase” of the bank asset account. The credit side is the “increase” of the loan liability account.

For example, here is the JV for the loan I made personally to my company of 10,000 US

As you make payments you will do manual JVs. You will debit (decrease) the loan liability account w/ party listed and then credit (decrease) the bank asset account.


#3

Can’t you just make such a doctype very easy by cloning the Purchase Invoice, name the new Doctype Loan to Company or so, against which you record repayments?


#4

If you treat it like a purchase invoice, you won’t capture the interested along with the principal payment and it would always show as a past due payable. There is an employee loan feature coming and an open issue to turn that into a full featured loan document as well, but that is future state at this time.


#5

Thanks for the explanation.

What is the 2351 account that you have selected. Is the party a supplier? If so is “unsecured loans payable - TxPo” a creditor a/c?