How do I manage a long-term loan or mortgage in Clubtreasurer?

About Loan/Mortgage Repayments and Expenses

Loans received and mortgage repayments are managed differently in financial statements. The interest portion of payments appear as "Interest Expense" in the Profit & Loss statement, while capital repayments reduce the outstanding loan or mortgage balance in the Balance Sheet.

To set up a received loan or mortgage in Clubtreasurer, you must create a Long-Term Loan account and, if applicable, record an initial loan balance as a negative value. Loan proceeds are recorded as an account transfer to a bank account, reflecting the deposit. Interest payments are recorded as regular expenses, impacting the Profit & Loss statement, whereas capital repayments are recorded as account transfers, reducing both cash balances and the outstanding loan liability in the Balance Sheet.

For mortgages linked to fixed assets, users should review the Fixed Assets tutorial for proper management.

In summary:

• Only the interest portion of a loan payment should appear in your Profit & Loss / Income Statement as "Interest Expense*". You may also be able to expense any loan arrangement fee*, if applicable.
  • *You may need to create new Payment Cost Codes if these do not already exist. 

• Repayments of loan/mortgage capital will reduce your capital balance owed ('Long-term Liability') and should be reflected in your Balance Sheet. These are not normally considered as an expense and so should not be included in your Profit & Loss / Income Statement. 

• If you are using Clubtreasurer to manage your fixed assets please also review the Fixed Assets tutorial pages to learn how to manage your property fixed asset(s) that are associated with the mortgage.

To create a Loan Received (Cash Received)

1. Create a new Account (Setup > Accounts > New Account):
   • Name: "Loan Account' (or any name)
   • Account Type: LONG TERM LOAN

   • Opening Balance:
     • If you a bringing an outstanding loan balance into Clubtreasurer:
       • enter loan balance as a negative value, e.g. <-£20,000> (NB Your opening Bank/Cash Account balances should also reflect the loan monies received).
       • Go to step 3
         • 
     • If this is a new loan in this year's accounts, enter £0 and record initial loan balance as an Account Transfer (Transfers > Account Transfers > New Account Transfer)

   • • • FROM Loan A/c => TO your cash/bank A/c
       • This creates the opening loan balance and records the fund deposit into your cash/bank account(s)
       • The initial loan balances will be reflected in your Balance Sheet under Assets (cash/bank account(s) and Long-term Liabilities (Loan)
         • 

2. Record loan interest payments as normal Payment transactions from your cash/bank A/c (Receipts & Payments > New Receipt/Payment)
   • These will be charged to your P&L.
     • 

3. Record loan capital repayments as an Account Transfer:
   • • • FROM cash/bank A/c => TO your Loan A/c
       • These will reduce your cash/bank account balance(s) and the remaining loan capital amount (long-term liability)
       • The capital repayments will be reflected in your Balance Sheet only.
         • 

To create a Loan Made (Cash Paid Out)

If your organisation is making the loan to a 3rd-party then you can follow a similar process, except that:

- The Loan Account should be setup as a DEBTOR Account Type.
- Your initial opening balance will be recorded as an Account Transfer from your cash/bank Account to the Loan Debtor Account.
- Interest payments received are recorded as Receipt transactions.
- Loan repayments are recorded as Account Transfers from Loan Debtor Account to the cash/bank Account. 

To create a Mortgage (Received):

1. Create a new Account (Setup > Accounts > New Account)
   • Name: "Mortgage' (or any name)
   • Account Type: LONG TERM LOAN
   • Opening Balance:
     • enter mortgage amount as a negative value, e.g. <-£300,000>
     • Go to step 3.
       

1.  
2. Record your interest payments as normal Payment transactions (Receipts & Payments > New Receipt/Payment)
   • These will be charged to your P&L.
3. Record mortgage capital repayments as an Account Transfer (Transfers > Account Transfers > New Account Transfer)
   • FROM cash/bank A/c => TO your mortgage A/c
   • These will reduce your cash/bank account balance(s) and the remaining mortgage amount (long-term liability)
   • The capital repayments will be reflected in your Balance Sheet only.