Fixed Assets & Loans

Tracking Borrowed Money Over Time

A Loan record is the mirror image of a fixed asset — instead of spreading an owned asset's cost over time, it spreads a borrowed liability's principal and interest over a repayment schedule, automatically posting each period's split.

Creating a Loan

1. Go to Accounting > Accounting > Loans → Create.
2. Lender – the bank or individual/company that lent the money.
3. Periods and Period Length – e.g. 60 periods of 1 month each for a 5-year monthly loan.
4. Rate and Rate Type – Nominal APR, Effective Annual Rate (EAR), or a Real Rate, matching how your lender quoted the rate.
5. Is Leasing – flag if this is actually a lease being accounted for as a loan.
6. Set the Journal and the Short-Term/Long-Term Loan and Interest Expense accounts.

The Amortization Schedule

Click Compute to generate one line per period, each showing:

• Payment Amount – the total instalment for that period.
• Principal Amount and Interest Amount – how that payment splits between reducing what you owe and the cost of borrowing it.
• Pending Principal – what's still owed after this payment, split into short-term (due within a year) and long-term portions — exactly the classification the Balance Sheet's Current vs Non-current Liabilities sections need.

Posting Each Period

Confirm the loan to move it to Posted, then post each period's line as it comes due — same discipline as the Fixed Assets batch depreciation run: do it on a fixed schedule so the liability balance and interest expense stay current rather than catching up several months at once.

Closing a Loan

Once fully repaid (or paid off early), mark it Closed. If paid off early, the remaining schedule's future lines are no longer posted — confirm the final payoff amount matches what the lender actually charged, since early payoff sometimes includes a fee not reflected in the original schedule.

Your Full Asset Register

Go to Accounting > Reporting > Assets (or the Assets list view, grouped by profile/status).

Key Views

• Asset list – every asset with Purchase Value, Value Depreciated, and Value Residual (current book value) side by side.
• Depreciation schedule per asset – every past and future period's amount, and which have been posted.
• Group by Profile – total book value per asset category, useful for a fixed-asset note in annual financial statements.

Reconciling to the Balance Sheet

The sum of all Running assets' Value Residual should equal the Balance Sheet's Fixed Assets line (net of accumulated depreciation). Reconcile these every period-end — a mismatch usually means either a manual journal entry touched an asset account directly, or a batch depreciation run was missed.

Best Practices

• Tag every capital purchase to an Asset Profile at bill-entry time — retrofitting assets after the fact is far more error-prone.
• Run batch depreciation on a fixed schedule (e.g. the 1st business day of each month), not "whenever someone remembers."
• Do a physical asset count against the register at least annually and investigate any asset that can't be located.
• Keep asset profiles aligned with your tax jurisdiction's required depreciation method and useful-life assumptions.

Monthly (or Yearly) Batch Run

Instead of opening every asset individually each period, use the batch compute action: it goes through every Running asset and posts whichever depreciation lines are due as of the run date, in one action.

Recommended Routine

1. Run the batch depreciation as part of your monthly close, before finalising the Profit and Loss for the period.
2. Review the generated journal entries before/after posting, same as any other recurring accounting entry.
3. Reconcile the asset register (see next article) against the Balance Sheet's Fixed Assets line each period.

Forgetting to run this regularly is the most common Fixed Assets mistake — it doesn't break anything immediately, but expenses understate and asset book values overstate until you catch up, and catching up several months at once produces one unusually large depreciation expense that's confusing to explain later.