Setup and Overdraft Account
Hi everyone, Can someone please give me some guidance as to how to correctly set up an overdraft account (which is a loan) in MYOB. I have the total amount and we've made 2 drawdowns and I al...
Forum Discussion
Hi LAL-Mary,
Totally get wanting to make sure the loan and repayments are recorded properly. The simple way in software is to:
- Set up a liability account for the loan.
- Record the receipt of the loan funds.
- Enter each repayment as you make it (principal to the loan, interest to an interest expense).
For step‑by‑step instructions, check out our Loans and repayments guide. Loans and Repayments.
Regards,
Genreve
Thanks Genreve,
I just wanted to check if an overdraft setup is the same as a normal loan.
For example, if the loan amount is for $100k, but the first draw down is only for $20k, do I only receipt the drawdown amount?
or
Do I enter the balance of the account as the full approval amount, eg $100k and just do a funds transfer when we drawdown from it?
Just wanted to ensure that i was entering it correctly from an accounting perspective as it's different to a normal loan.
Cheers
Mary
Hi Mary,
Great question. An overdraft is a revolving limit, so you only record what you actually use, not the full limit. So it's different in how you record the principal amount: you record each drawdown as it happens. Repayments work the same as a normal loan: split the payment between principal (to the overdraft) and interest (to Interest Expense).
Regards,
Genreve
