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Loans transactions and categories

Matteo

Hi there, I use Quicken Classic Business in Italy; I enter all transactions manually as it is not possible to sync Quicken with bank accounts in our country.

I would like to have clarification regarding the management of loan accounts.

I created a manual management account for the loan. I entered the monthly payment reminders linked to the bank account where the loan is supported. I would like the transaction to be written in the bank account, transfered to the loan account and that the amount is attributed to 2 expense categories (loan capital and loan interest). I managed to split the expense categories on these transactions but, when I split them, the transactions do not decrease the total amount of the mortgage in the mortgage account.

Can you please give me directions on how to proceed to obtain the desired result?

Thank you.

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Comments

NotACPA

"Loan Capital", I assume you mean the current balance of the loan, should be an Account …. not a category.

Then, when you split the loan payment in your banking account, one line of the split would be a transfer to the loan (reducing it's outstanding balance) and the other would go to the interest expense.

BTW, where in Italy do you live? My family lived in Milano from 1969-1972.

Tom Young

"I created a manual management account for the loan. I entered the monthly payment reminders linked to the bank account where the loan is supported."

That statement isn't entirely clear. When you create a new loan Account in Quicken using the loan "wizard", you are asked if you want Quicken to create Reminders and if you want the Reminders automatically entered into the checking Account from which you will make the periodic payments. Is that what you are describing here? That "where the loan is supported" is confusing me as "where the loan is supported" might be talking about the lender's account or the bill-paying (checking) account.

"I would like the transaction to be written in the bank account, transfered to the loan account and that the amount is attributed to 2 expense categories (loan capital and loan interest). "

I think that's where you are going wrong. Even though the principal portion of the payment feels like an "expense", it's not, at least not as accountants use the term "expense." It's really a "Transfer", a bit of Quicken terminology that means moving money between balance sheet Accounts. I think what you are doing here is using a Category, (another bit of Quicken terminology referring to true income or expense events), instead of of a Transfer. For that part of the payment you want to use the name of the loan Account, surrounded by square brackets: [Name of Loan Account]. That will reduce the loan's balance.

If you used the Quicken loan wizard to set up the loan then the wizard should make the correct entry for the principal portion of the payment, so maybe you didn't use the wizard in your setup?

Matteo

Hi Tom, thank you for your kind feedback.

Yes, I confirm that I used the guided wizard to prepare the loan payment reminder.

In fact everything worked for a certain period; However, I recently realized that the loan account balance was not being updated. I then contacted Quicken support who suggested me to run a fix on my Quicken file. Once this was done, he then explained to me how to set up transfers from the Quicke account where the loan is debited to the loan account.

With this method I actually see the balance update correctly. However, I can no longer have the division between capital and interest but it is an aspect that interests me little. Furthermore, I asked this question because transfers are not reported in some types of reports (such as the "Spending by category" report) and, even if the loan is not actually an "expense", it would have been useful for me to see it in that report as an expense.

Let me know if everything is clear. Thanks again for the help!

Matteo

https://community.quicken.com/discussion/comment/20422176#Comment_20422176

Hi and thanks. I have set up transfer reminders from the loan debit account to the loan account. For the moment I have managed to transfer the sum of the entire instalment. It is not clear to me how to split the sum into two categories because, if I do so, the balance of the loan account is not reduced.

Thank you.

PS: I'm from Monza, about 15km from Milan :)

NotACPA

In that payment split, one portion is a TRANSFER to the loan account … which reduces the amount of the loan. It DOESN'T go to a category. To record a transfer, use the category field … but put the name of the loan account in square brackets, [Loan Account name].

The other portion, the interest, is posted to an appropriate category.

And, to be more precise, we lived in Brusuglio di Cormano, about halfway between Milano and Monza. Brusuglio's most famous resident is Count Alesandro Manzoni, who's mansion was just down the street (Via Promessi Sposi) from our house.