Journals in Xero - The Book-keepers Forum (UK)

BC Boy · Veteran Member

Journals in Xero

Cheshire · Master Book-keeper

Im lost.

Why would you split out the payments when they will cover the 'on demand' or this current year's element of the loan repayment schedule?

Do you in fact mean how would you split out the interest and the repayment of capital aspects of the loan payment?

I understand from past posts that you are a QuickBooks user - does that extend to QBO? If so perhaps you can help with those queries? There have been a few lately (well, ok all mine!)

BC Boy · Veteran Member

Hi,

I'm not splitting out the payments I'm looking to separate current (less than 12 month) liability of the loan from more long term liability within the balance sheet. This is because I wish to report current and more long term liabilities separately because current liabilities are obligations that are due within one year of the balance sheet's date and will require cash payment. This will help the company to determine the liquidity needs of the company.

PS. Easier in QB, either the loan is not posted as a bank account and if it is you can journal from/to the bank. TBH my preference is for the former.

-- Edited by BC Boy on Tuesday 13th of August 2019 12:07:37 PM

Cheshire · Master Book-keeper

BC Boy wrote:

-- Edited by BC Boy on Tuesday 13th of August 2019 11:44:19 AM

I dont use zero (my name for it!)

Are you using the software to produce year end accounts?

Can you just do a dummy close down of the loan as a 'Bank' account and re-set the loan to split between two part of the SFP (sorry dont know what they are called in your software - nominals/accounts/pots/whatever)?

If that doesnt work, I might actually suggest something sensible later when Im not in the midst of margin scheme nonesense for a client (perhaps this evening when brain is not wired), unless someone else comes along, although there arent many zero users on here neither.

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Sorry - ignore what I suggested here, wont work for your reconciliation process. Head not in gear!!!!!!

-- Edited by Cheshire on Tuesday 13th of August 2019 01:08:48 PM

Leger · Master Book-keeper

Hi Lewis.

I would have thought the easiest way is to journal the 12 month element to a suspense account, then on to the loans payable within a year.

BC Boy · Veteran Member

Thanks but as mentioned cannot journal from a bank account in Xero

Cheshire · Master Book-keeper

Leger wrote:
Hi Lewis.

I would have thought the easiest way is to journal the 12 month element to a suspense account, then on to the loans payable within a year.

BC Boy wrote

Thanks but as mentioned cannot journal from a bank account in Xero

___________________________________________________________________________________________________________________

Not what John is suggesting. If you journal to your bank account then surely your bank will never balance to its bank statement.

Might help if you answer my Q

BC Boy · Veteran Member

Cheshire wrote:
BC Boy wrote:
Hi,
I'm not splitting out the payments I'm looking to separate current (less than 12 month) liability of the loan from more long term liability within the balance sheet. This is because I wish to report current and more long term liabilities separately because current liabilities are obligations that are due within one year of the balance sheet's date and will require cash payment. This will help the company to determine the liquidity needs of the company.
Ah right - I misread the point you were making about the bank feeds and the need to split the account, presumably because you have set the loan up as one bank account rather than just setting up as a liability account (x2) in the balance sheet within the software.
You are talking to an ex corporate financier so I do get what you mean by the 2nd sentence.

PS. Easier in QB, either the loan is not posted as a bank account and if it is you can journal from/to the bank. TBH my preference is for the former.
I wasnt actually asking about how to undertake this scenario this QBO - more the fact that we havent got anyone on here who is an expert. Or we may have an expert but they never post unless asking for something themselves.
Ah, sorry. My bad. I'm far from an expert. I have been off the grid for some while but will be keeping more of an eye on the forum so but if i can assist anyone then i will.

-- Edited by BC Boy on Tuesday 13th of August 2019 11:44:19 AM
I dont use zero (my name for it!)
Are you using the software to produce year end accounts? No but the clients accountant will.
Can you just do a dummy close down of the loan as a 'Bank' account and re-set the loan to split between two part of the SFP (sorry dont know what they are called in your software - nominals/accounts/pots/whatever)? May have to use this option.
I have more and more clients moving to Xero so it would be good to understand if there is a legitimate way to handle it.
If that doesnt work, I might actually suggest something sensible later when Im not in the midst of margin scheme nonesense for a client (perhaps this evening when brain is not wired), unless someone else comes along, although there arent many zero users on here neither.

Leger · Master Book-keeper

PC Boy wrote:
I said:

I would have thought the easiest way is to journal the 12 month element to a suspense account, then on to the loans payable within a year.

Thanks but as mentioned cannot journal from a bank account in Xero

Sorry, I had assumed the loan had been allocated to creditors > loans over 1 year and you wanted to shift the next year into > loans under 1 year. (Don't know the correct descriptions in Xero)

Onion4Sage · Senior Member

Hi Lewis,

V quick as I'm about to run out the door. I don't know Xero at all so this may not work for you. Here's what I'd do in Sage.

I assume the LTL bank account is coded to the LTL section of the COA. I'd set up two accounts. One would be an "offset" account in the LTL section. The other would be the "within 12 months" liability within Current Liabilities. The COA would group the two LTL accounts together. Then you just Dr the "offset" account and Cr the "within 12 months" account to achieve the appropriate disclosure. That way you're not having to journal to the bank account and you continue to reconcile it as normal.

Regards,

Rachel19 · Veteran Member

Rather than posting as a journal, could you post the transfer amount as a bank receipt from the LT loan liability? I'm not sure whether that might affect the bank feed though?

Cheshire · Master Book-keeper

Onion4Sage wrote:
Hi Lewis,

V quick as I'm about to run out the door. I don't know Xero at all so this may not work for you. Here's what I'd do in Sage.

I assume the LTL bank account is coded to the LTL section of the COA. I'd set up two accounts. One would be an "offset" account in the LTL section. The other would be the "within 12 months" liability within Current Liabilities. The COA would group the two LTL accounts together. Then you just Dr the "offset" account and Cr the "within 12 months" account to achieve the appropriate disclosure. That way you're not having to journal to the bank account and you continue to reconcile it as normal.

Regards,

Spot on Ian!

Although I would suggest if you are only doing bookkeeping to leave it to the Accountants who will do the necessary under the Extended Trial Balance (ETB) process.

Unless you have a desperate need to have them separate in the management accounts, assuming you produce them.

Cheshire · Master Book-keeper

Rachel19 wrote:
Rather than posting as a journal, could you post the transfer amount as a bank receipt from the LT loan liability? I'm not sure whether that might affect the bank feed though?

That would cause an issue for the Bank rec methinks

BC Boy · Veteran Member

Thank you all for your time and consideration.

Rachel19 · Veteran Member

That's what I was afraid of. The bank feed could be turned off for the loan account if necessary, which would eliminate that problem. I see a better solution has been found though so no need to tinker with what's already there!