Create new nominal codes (N/C)

Ensure that the following nominal codes exist in the accounts:

Nominal Code	Name	Management report	Section of Chart of Accounts
1200	Bank Account	Balance Sheet	Current Assets / Liabilities
2301	Director's Loan	Balance Sheet	Long Term Liabilities Set up as a Current Liability if you're to repay the loan within one year.
7903	Loan Interest Paid	Profit and Loss	Overheads

Create the new nominal codes if they don't exist.

1. Go to Nominal codes then select New.
2. Complete the Nominal Record as follows:
   
   

   N/C	Enter the number for the nominal code you want to create.
   Name	Enter a name for the nominal code.

3.  Select Save then Close.

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Example

Values used in the examples below:

• A director loans the company £/€2,000
• This is repayable to the director over two years
• The total monthly repayment value is £/€95.83
• Repayment split into £/€83.33 for the loan and £/€12.50 interest repayment

Record the receipt of the loan

Record the loan as an increase in the balance on the bank account, and as a director's loan liability on the Balance Sheet report.

To do this, post a bank receipt.

1. Go to Bank accounts then select Bank receipt.
2. Complete the Bank Receipts window as follows:

   Bank	Date	Ref	N/C	Details	Net	T/C	Tax
   1200	Receipt date	Ref	2301	Director's Loan	2000.00	T9	0.00

3. Select Save then Close.

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Record the loan repayment

Every month, record the payment from your bank account to the loan account on the Balance Sheet. Also, record the loan interest paid on the Profit and Loss report. This reduces the loan liability balance and increases the interest paid balance.

To do this, post a monthly bank payment until the loan is fully repaid

1. Go to Bank accounts then select Bank payment.
2. Complete the Bank Payments window as follows:

   Bank	Date	Ref	N/C	Details	Net	T/C	Tax
   1200	Payment date	Ref	2301	Loan Repayment	83.33	T9	0.00
   1200	Payment date	Ref	7903	Loan Interest	12.50	T9	0.00

3. Select Save then Close.

If required, set up the loan repayments and interest payments as recurring entries.