How do I deal with settlement of financed clothing?

Summary

This article will explain how to deal with the settlement payment when received for finance taken out for clothing.

More Information

When you receive the payment from the finance company you will need to journal the amount into the Bank Account and out of the relevant Finance Company Control Account which was used to finance the clothing items. To do this you will need to go to " Nominal Ledger Journal Entries Double Entry".

• On "1st Centre:", enter the centre for the Bank Account.
• On "Date:", enter the date that you received the payment from the finance company.
• On "Amount:", enter the value received from the finance company as a positive amount, because you will be debiting the Bank Account and crediting the Finance Company Control Account.
• On "Cheque No./Comment:", enter the 'Finance Reference'.
• On "2nd Centre:", enter the centre for your Finance Company Control Account.
• The "Amount:" will be entered automatically as a negative of the amount entered previously.
• Click [Accept] to post the journal.

This posting should have the effect of reducing the value in the Finance Company Control Account and increasing the amount in the Bank Account.

If there is any difference to the amount received to the amount financed, for example if the finance was subsidised by yourselves, you will need to post this amount to a centre for Finance Charges. This will be a Profit & Loss Cost of Sales centre, which you might need to create if you do not have one already in your system.

See also

• How do I Finance Clothing Items?
• How do I create a nominal code?
• What is a nominal code?
• How do I find a Nominal Ledger Number?

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Keywords AND Misspellings

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