[GNC] Loan to family member: How do i setup the account structure

[Stephen M. Butler]

I presume that you currently "expense" the loans.  They really are not
an "expense" but a change of asset (from your savings account to a
receivable.


1.  Add a new Asset account called "FaF Loans"  (Friends and Family
Loans).  Mark it as a placeholder.
2.  Under FaF add a new account for each person to home a loan is made.

For your use case enter the following transactions:
A.  Transfer £2000 from Savings1 to Checking.
B.  Transfer £2000 from Checking to FaF:Family1

Note:  If both happen at the same time, you could combine them into a
multi-split transaction with Checking having two offsetting splits.

 
C.  £100 from Faf:Family1 to Checking
D.  £100 from Checking to Savings2

Note:  Doubtful that the above two transactions happen at the same time
so shouldn't combine.

By looking at the transactions for each of the sub-accounts in FaF you
would see the original loan amount plus all the payments.  The account
balance would be the outstanding balance.

Now, if you should charge interest, the interest portion would be
income.  I presume that you already earn interest on other accounts so
would already have that account setup in the Income area of CoA.

The payment would then be split with FaF:FamilyX and Interest-Income on
one side and Checking as the destination.
 


On 9/23/20 4:27 AM, John Mansfield wrote:
> I have lent monies to a family member and now wish to track the balances on an ongoing basis.  I have been looking at the guides etc but just cannot understand the concept / account hierarchy given my circumstances.
>
> The software I am using is:
>
>   *   Version: Version: 4.1, Build ID: 4.1+(2020-07-25)
>   *   Windows 10
>
> My location/currency is:
>
>   *   GBP, UK Based
>
> My Gnu Cash account setup is:
>
>   *   I have a cheque account
>   *   I have a savings account 1
>   *   I have a savings account 2
>   *   Plus others.
>
> My use case is:
>
>   *   It will be an interest free loan
>   *   My family member has borrowed £2000
>      *   Loan taken from Savings account 1 into
>      *   Cheque Account then electronically bank transfer
>      *   To family member bank account.
>   *   A repayment is made each month
>   *   The family member transfers a set amount, say £100.  This is electronically deposited into my bank Cheque account
>   *   To date, I have electronically bank transferred monies into Savings Account 2 and updated gnu cash
>   *   I have no immediate report of monies repaid / outstanding.
>
> My preferred outcome:
>
>
>   1.  To track the Principal amount of £2000
>      *   To track each payment into my Cheque Account from family member - normally monthly (once bank transactions have been uploaded into gnu cash)
>      *   To understand how much has been paid - to date
>      *   To understand how much is outstanding
>      *   To transfer each repayment into Gnu cash Savings account 2 and bank account
>      *   To be able to get reports on the above.
>
>
> Given the above, I would be most grateful if you can advise what account hierarchy / transaction splits etc I need in Gnu cash to support the above?
>
> I thank you for your time and support.
>
> Regards
>
> John Mansfield

-- 
Stephen M Butler, PMP, PSM
Stephen.M.Butler51 at gmail.com
kg7je at arrl.net
253-350-0166
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