Bank Loans

You can record a loan by creating a new bank account in Tally, this will always have a negative balance until the loan is paid off and represents the debt you owe.

Creating the Loan Account

To start, first go to Bank > New Bank Account. The three required details you need to complete are:

  • Account Name – this should be the name of the account; for example ‘HSBC Business Loan’. If you have several loans you might find it better to put in the loan account number after the name
  • Starting Date – should be the date that this loan was accepted
  • Starting Balance – should be zero. If you’re an existing business then this instead should form part of your opening balances

When ready click Update.

Recording the Loan Deposit

The next step is to create a bank transfer. This will transfer money from the loan account (putting that into a negative balance) into the account the money was deposited into. This will then accurately reflect the debt you owe and the money you gained. To do that, go to Bank > Transfer money between accounts.

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