FAQ: How Do Loans Work In Bullet Online Accounting Software
Why does the “Record payment for bill” only display sometimes?
This link is only available when a bill has not been fully paid. If a bill is fully paid, and you view it, there won’t be a “Record payment” link, because it’s already been paid in full. If the bill hasn’t been fully paid, then the link will be visible.
But when I set the loan in the future they disappear?
You’re actually on the loan page in that screen – not a bill page.
How Loans Work?
When you create a loan, we ask you for 2 dates:
1) When did you get the money: This is the date that you get the loan into your account. After the loan has been created, we will increase you bank account balance in bullet by the loan amount on this date.
2) When do the repayments start: This is the date that you are start paying back the loan. Bullet will create a Bill on this date, and then every month/week to record the fact you owe the bank money. You can mark those generated bills as paid (they will be automatically marked as paid if you selected that option when creating the loan).
The idea behind loans is that it’s money you get but make regular repayments of the same amount each month – it’s not designed for when you get money and repay it at random times or different amounts. It’s typically means for recording loans from banks, credit unions etc.
Some follow up questions on loans:
1. Start Date
Do you still put the start date of the loan, even if it was 4/5 years before you started using bullet. Or can you just start the loan with the balance due at the time of starting bullet?
2. Extra Payments / Early Payments
What way do you deal with extra payments? For example some months with surplus cash you might pay off a little extra on higher interest loans. Can these be entered in manually?
(1) depends on how you are using Bullet. If you want to start doing your accounts in Bullet from 2015-01-01, then you’d enter the loan as if it was starting on that date (with the reduced balance and repayments). If you wanted to do last year’s account on bullet to (so you’re starting from 2014-01-01), then you’d enter the loan as it was on that date.
(2) The loans in Bullet expect that all repayments will be the same value – at the moment there isn’t a way to record additional payments against a loan. You’d have to record the loan details manually rather than using the Loans feature in Bullet (i.e. You’d have to record a journal entry for the loan amount received, and manually create the bills for each repayment, since the amount paid might change).
I think I will go with the manual method. Is this the correct way to do it:
1. Create a new account with a negative balance
2. Transfer payments as they happen
3. Manually add interest charges quarterly as the bank adds them?
Will that keep everything right with expensing the interest payments etc?
There are a few different ways to do it (based on what type of information you need to record), but what you’ve described is probably the easiest way to deal with it currently. Is there more than 12 months left on the loan? If so, there may be some additional things you should record.