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Loans Between Trading Entities

Owned by P Sawkins (Unlicensed)
Last updated: 07, Sept, 2018
4 min read

Table of Contents

Trading Between Host Companies

Terms are set on the debtor and show on the creditor normally.

When you have a number of host companies in the system that operate loans rather than payment terms.  The payment terms can be replaced by a term called "Loan".

Typical example is a 100% owned company that you settle up the trading every month or quarter.

Both companies need to be host companies in the system

A transaction created in one Host company will create the required transaction in the other Host Company

Only persons who have access to both the Host Companies are able to create manual transactions.

The only transactions allowed are:

  1. Debtor Invoice (Creates Creditor Invoice in other company) with Creditor Invoice Subtype = "Trading Loan Mirror"
  2. Creditor Payment (Creates Debtor Payment in other company)

The loan total value is visible on the Host Company.  The Loan Total Value is also visible on the Balance Sheet

  1. Where the net value of the loan is money owed to you - it will appear as part of Trade Debtors
  2. Where the net value of the loan is money owed by you - it will appear as part of Trade Creditors

Transactions

Transactions Allowed

Any Transaction created will create a transaction in the other entity - so only a few transactions are allowed

  1. Debtor Invoice
  2. Creditor Payment
  3. One of your Debtors Paid Me - Common in groups of companies with the same name

Stock Articles or Services Required

When a transaction in one Host Company is to create a transaction in another Host Company - the system needs to determine the GL accounts to use in the other Host Company. This is done by enforcing each line to have a link to a Service or Stock Article that has a buy and a sell GL Account default. 

Create a manual debtor invoice

The Matching Creditor Invoice will be created by the system in the other Host Company

The Creditor Payment - must have bank information entered that matches the target Host Company Bank Account

When the creditor payment is created = a debtor payment is created in the other host company - and the reference from the other host company will show as external ref number.

The Debtor payment that was created in the other Host Company

View the loan value anytime

On the host company

On the Balance Sheet

Setup

Create the loan and indicate the start date.  A loan can be setup at any time. 

All transactions before the start date are not added to the loan value as they may not have matching transactions in the other entity.  

So transactions before the loan date will still be paid using Bulk Pay Creditors

Define the loan in one of the Host Companies - Status will be "Proposed".  From the other Host Company status will show as "Awaiting Approval" - Change Status to "Active"

The loan can be ended at any time and any transactions after the end of the loan will use normal collection terms.

This will put the terms on the Debtor and Creditor in both Host Companies of "Loan"

For information about SaaSplications go to http://saasplications.com.au