When you receive a loan or note for operating or capital expenses, you’ll be able to keep track of this loan on your balance sheet as a liability. As you pay down the loan, your balances will be updated accordingly. The same steps can be followed for tagging mortgage or other land payments.
This video walks through how to add a loan to your balance sheet and tag loan payments in Ambrook. The steps are also written out below.
Follow along with our customer success team to tag loan payments in Ambrook.
Adding a Loan Account
Adding an Existing Loan
To add a loan you already had when starting your books in Ambrook:
Go to Balances and click "New Account".
Click the appropriate liability type (loan, line of credit).
Set the Opening Date to the date you're starting your books in Ambrook.
Enter the amount you owed on the loan as of that date. You can usually find this information on your loan statements or in your online loan portal.
Save the account - you'll now see it on your Balances page.
Adding a Loan You Got After Starting Your Books in Ambrook
Go to Balances and click "New Account".
Click the appropriate liability type (loan, line of credit).
Set the Opening Date to the date you got the loan.
Set the opening balance as zero and save the account.
When the cash inflow shows up on your Ledger as a deposit in your bank account, you can categorize it as a Liability Adjustment to this loan account to update the outstanding balance you owe.
If a deposit transaction does not show up on your Ledger, you can adjust the balance of the loan by selecting the loan account on the Balances page and selecting “Adjust Balance”. Make an adjustment for the initial balance you owe. This will create a transaction on your ledger associated with this loan account. If you’re using this cash inflow for an asset purchase, you can then tag that transaction to the correct asset account (see Asset Purchases for detailed instructions on how to record assets purchased with a loan).
Tagging Principal Repayments and Interest
Either monthly or annually, you’ll likely have transactions on your Ledger that reflect principal and interest payments on the loan or mortgage. When you see these transactions, you can:
Click on the transaction to pull up the transaction details.
If the payment includes both principal and interest, split the transaction by scrolling down and clicking Add Line Items.
Identify the principal and interest portions of the payment. This will be on your loan statement or in your bank portal. Add a line item for the principal amount and a line item for the interest amount as shown below. Click Done.
Tag the principal repayment as a “Liability Adjustment”, and select the loan or mortgage account it belongs to. This reduces the balance of the liability account on your balance sheet.
Tag the interest to your interest expense category. It’s important to split these out for both tax purposes and for maintaining an accurate balance sheet.
Always ask your accountant for guidance on specific treatment on your loan accounts.