Loan Manager tracks the loans your business owes: a bank term loan, a vehicle loan, a mortgage on the building. For each loan you record its terms once — amount, rate, term, how often it is paid — and SeroBooks shows the schedule of payments and, when you pay, records the payment for you split into the part that reduces the loan (principal) and the part that is interest.
The loan itself lives in a liability account in your Chart of Accounts. The balance Loan Manager shows is always that account's balance on the books, and the schedule is worked out from there, so what the books say you owe and what Loan Manager says you owe never differ.
Before you add a loan
- Create a liability account for the loan in the Chart of Accounts, such as "Loan Payable — Vehicle". It must be a loan account of its own, not Accounts Payable. See Add, edit, merge or make an account inactive.
- Record the money you borrowed, so the loan account has its balance. Adding a loan to Loan Manager does not post anything. Usually this is a deposit of the loan advance into the bank with the loan account as the From Account (see Make Deposits), or, for a loan that already existed when you started using SeroBooks, the loan account's opening balance.
Add a loan, step by step
- Open Banking ▸ Loan Manager and choose Add a Loan….
- Fill in the Add Loan window (every field is described below).
- Choose OK.
The loan appears in the list and is selected, with its payment schedule underneath.
The Add Loan / Edit Loan window
| Field | What to enter / what it means |
|---|---|
| Loan name | A name you will recognise, such as "Delivery van loan". |
| Loan account (liability) | The liability account the loan is in. |
| Lender | Search for the lender (the bank or finance company) as a name in your lists. Optional. |
| Origination date | The date the loan started. |
| Original amount | How much was borrowed. |
| Term (months) | The length of the loan in months. Starts at 60. |
| Interest rate (% a year) | The annual interest rate. |
| Payment period | How often a payment is made: Monthly, Every two weeks, Weekly, Quarterly, Semi-annually or Annually. |
| First payment | The date of the first payment. |
| Payment (blank: work it out) | The regular payment amount. Leave it blank and SeroBooks works out the level payment that pays the loan off over the term. |
| Escrow each payment | An extra amount paid with each payment that is not principal or interest, such as property tax or insurance collected by the lender. Optional. |
| Pay from (bank) | The account the payments come out of. |
| Interest expense account | The expense account the interest goes to. |
| Escrow account (if any) | Where the escrow part of each payment goes. |
Pay from (bank) and Interest expense account are needed before you can record a payment.
The loan list
| Column | What it means |
|---|---|
| Loan | The loan's name. The selected loan is in bold. |
| Lender | The lender. |
| Balance | The loan account's balance on the books today. |
| Next Payment | The date of the next payment due. |
| Payment | The regular payment amount. |
| Rate | The annual interest rate. |
Click a loan to select it. The buttons at the top act on the selected loan: Edit Loan Details…, Set Up Payment… and Remove Loan.
The payment schedule
Under the list, PAYMENT SCHEDULE shows every payment still to come on the selected loan, worked out from today's balance:
| Column | What it means |
|---|---|
| # | The payment number. |
| Date | When it is due. |
| Payment | The payment amount. |
| Principal | The part that reduces the loan. |
| Interest | The part that is interest. |
| Balance | What is still owed after the payment. |
When nothing is owed, it says Nothing owed on this loan.
Record a loan payment
- Select the loan and choose Set Up Payment….
- Check the Payment date. It starts on the next payment date.
- Check the Payment amount. It starts at the regular payment. If you pay more than scheduled, the extra goes on principal.
- The window shows how the scheduled payment splits: principal, interest and any escrow.
- Choose Record Payment.
SeroBooks records the payment as a general journal entry and confirms how much went to principal and to interest.
What happens in the books
For each payment:
- The loan account is debited with the principal, so the loan balance goes down.
- The interest expense account is debited with the interest. The interest is the loan balance on the payment date times the annual rate, divided by the number of payments a year.
- The escrow account is debited with the escrow amount, if any.
- The Pay from account is credited with the total.
Remove a loan
Remove Loan asks first: the window Remove this loan? names the loan. Choose Remove Loan to take it off the Loan Manager, or Cancel to keep it. Its account and every entry already posted stay exactly as they are; only the loan's terms and schedule are removed. You can add it again later.
Permissions
Adding, changing, removing and paying a loan all need Post Journal Entry, because the payment is a journal entry.
Messages you may see
| Message | What to do |
|---|---|
| Choose the liability account the loan is in. | Pick the loan account. |
| A loan needs its own liability account (Loan Payable), not Accounts Payable. | Create a loan account and choose it. |
| A loan needs its name, amount, term, rate, how often it is paid, and its dates. | Fill in the missing fields. |
| Choose the account the payment comes from and the interest expense account first. | Edit the loan and fill in Pay from (bank) and Interest expense account. |
| Nothing is owed on this loan. | The loan account's balance is zero on the payment date. Check that the loan advance was recorded. |
| The payment does not cover the interest. | The amount you typed is less than the interest due. Enter at least the interest. |
Tips
- Compare the schedule with the lender's statement now and then. If the lender's balance differs, find the difference in the loan account's register before the next payment. See Use Register.
- The interest actually charged can differ slightly from the schedule. If the lender's statement shows a different split, correct it with a general journal entry.