Once you buy a fixed asset using a loan or hire purchase, you need to record each repayment correctly. This includes separating the repayment of the loan from any interest charged. You can do this manually or by setting up a recurring payment.

Option one: Set up a recurring bank payment

To automate the monthly payment:

1. Go to Banking and open the relevant bank account.
2. Select New, Purchase / Payment, then choose Other Payment.
3. Enter the payment date and reference.
4. Add two separate lines to split the amount:
   

   Ledger Account	Details	VAT Rate	Total (£)
   Hire purchase (2300)	Hire purchase repayment	No VAT	250.00
   Hire purchase interest (7901)	Interest charged	No VAT	50.00

5. Save the payment.
6. Open the payment and select Make Recurring.
7. Set the repeat frequency (for example, monthly) and an end date.

This method is best if your repayments are the same each month.

Option two: Record repayments manually each month

If you're importing transactions from your bank feed or statement:

1. Select Create next to the imported transaction.
2. Choose Split Transaction.
3. Enter the details on two lines:

   Description	Ledger Account	VAT Rate	Total (£)
   Hire purchase repayment	Hire purchase (2300)	No VAT	250.00
   Hire purchase interest	Hire purchase interest (7901)	No VAT	50.00

4. Confirm the split matches the full transaction total.
5. Save the transaction.

Example:

If your monthly payment is £300, and £50 of that is interest:

• Repayment (loan): £250 to 2300 – Hire purchase
• Interest: £50 to 7901 – Hire purchase interest

Keep your reports accurate

Always split repayments between the correct ledger accounts. This helps you:

• Track how much you still owe
• Separate interest from the asset value
• Keep your balance sheet and P&L accurate