Loan schedules and interest in the financial statements
Build a loan's amortization schedule (by hand or by having the contract read by AI): interest expense, accrued interest, balance and current portion are split for the year automatically.
The Loans (schedules) page keeps the amortization schedule of each of the client's loans. A loan is entered once: the schedule then gives, for the open file's year, the interest expense, the accrued interest at year-end, the closing balance and the current portion (principal due within 12 months), and reconciles them with the trial balance.
From the contract to the financial statements
- 1Click Add a loan. At the top of the form, drop the contract (photo, PNG, JPEG or PDF): a progress bar follows the reading (a few seconds), then the AI fills in the form on the spot — principal, rate, term, date, payment, frequency. You can also enter everything by hand.
- 2Check every value against the contract. The AI decides nothing: dates are converted by fixed rules, each value is searched in the document text, and the contract's payment is recalculated by the schedule. A green message confirms the reading is consistent; a red one says what is not. The first payment date is often missing from the contract: enter it.
- 3Step 1 — the accounts. Choose the trial balance accounts: the loan, the interest expense (and accrued interest if you show it separately). The Trial bal. button opens the trial balance with balances (after adjustments when there are any, marked R) and lets you create a new account in the trial balance of the file, with a free number already suggested. For a new loan, “Create the missing accounts in the trial balance” does it in one click. The current portion is automatic: the “Current portion of long-term debt” account is reused or created by itself, and the financial statement note shows it with no action.
- 4Accrued interest payable: by default it is simply added to the loan balance (year-end estimate, no separate account) — enough in a compilation engagement when it is not material. You can choose to show it in a separate account. The year's interest expense is the same either way.
- 5Step 2 — the reconciliation: loan balance, interest expense (and accrued interest), trial balance side and schedule side. Differences are normal: they are what the entry corrects.
- 6Step 3 — the entries. Each one is explained in sentences, with your amounts (“Adds $2,091.86 to interest expense…”, “Increases the loan by…”). A check says whether the trial balance's payments match the schedule's. Click Post the interest, then Post the reclassification: the entries go to Adjustments and the financial statements update.
Several loans in one file
The overview at the top of the page lists all the client's loans: rate, payment, closing balance, current portion, interest expense and what is left to do (accounts to choose, to post, difference to settle, up to date). Click a line to open or collapse the loan. One loan account per loan (a trial balance balance cannot be shared between two schedules); the interest account can serve several loans, and the current portion is common. A loan that starts after the year, or was repaid before it, shows as “outside this year”.
New loan, advance missing from the trial balance. If the loan was advanced during the year but the trial balance records it nowhere, the schedule cannot balance: the message says so (“the loan of … was advanced on … but this advance is not in the trial balance”) and you choose the account where to record it (the financed asset, the bank, an advance…). When neither the advance nor the payments are in the trial balance, the message names both: the difference is the advance minus the payments made since. The debt is booked as a credit to the loan account; what you choose is its counterpart, as a debit — never the loan account itself (the entry would cancel itself and the debt would not appear: the screen refuses that choice and flags an already-posted entry that cancels itself). Principal is never booked as interest expense.
Special cases: one window for each
Under Special cases, in the loan form, four lines: Capital pause (moratorium), Interest pause (holiday), Extra payments and Rate that changes (variable rate). Is your loan plain and simple? Skip this part. If not, click Add on the line that applies: a small window opens with short words, an example and What it changes (the payment, total interest and the loan's end date, before and after). Nothing changes until you click Save; Remove takes the case out. A line showing a small summary (“From 2025-02-01 to 2025-07-31”, “1 rate change”) has an active case: Change reopens it.
What the schedule can do
- Frequencies: weekly, bi-weekly, twice a month (days of your choice), monthly, every two months, quarterly, semi-annual, annual; payments in arrears or at the start of the period.
- Repayment types: constant payments (calculated, or entered as the contract sets them), constant principal repayments (decreasing payments), interest only.
- Term shorter than the amortization: a 5-year loan amortized over 20 years with the balance due at maturity; or a residual value.
- Interest: nominal rate ÷ number of payments (the usual convention), semi-annual, daily or other compounding, or daily interest (actual/365, actual/360, 30/360).
- Variable rate: rate changes are dated; the payment is recalculated at each change (or kept, and the last one adjusts).
- Principal moratorium (interest only for a period) and interest holiday (no payment: interest is added to the principal).
- Optional additional payments: the term shortens, or the payment decreases.
- Exports: PDF (a working paper in the style of firm schedules) and Excel.
The entries, and why they never double
The interest entry brings three things in the trial balance to the schedule: the year's interest expense, accrued interest payable and the loan balance. It is proposed only if it balances by itself: when payments were recorded in full against the loan, the balance difference is exactly the interest paid. If the trial balance differs for another reason (an unrecorded payment, a missing advance), the difference is explained and the entry is refused until you fix the trial balance or choose the account that takes the difference.
The current portion reclassification moves from the loan to current liabilities the principal due within 12 months after year-end (the whole balance if the loan matures within the year). It is a presentation reclassification: it is not carried forward. Posting an entry again replaces it (it carries the label “Cédule de prêt #…”): it never doubles.
Supporting evidence for the loan account
The Attach as evidence button prints the schedule as a PDF — with the reconciliation to the trial balance, the accounts used and the entries posted — and attaches it to the loan account, with the contract, where you validate that account (trial balance). Attaching again replaces it; if the piece already carries annotations (tick marks, vouched amounts), the old one stays intact and the new version is added under a new reference.
The long-term debt note
In the note, the Use the schedules button carries over the current portion and a sentence describing each loan (lender, rate, payments, maturity), which you can edit. A warning appears if the schedules' balance differs from the debt presented.
Always reconcile the schedule with the lender's statement: the first payment date, fees, insurance and the lender's rounding can make the schedule differ by a few cents. The contract read by AI is kept with the loan, but responsibility for the reading stays with the accountant.