Some businesses have the option of financing a loan for a customer when selling a larger item. For tax purposes interest income and sales income need to be tracked separately. In this article we are going to set up this process for a car dealership. The item names and processes can be customized for the individual business need. Please read through the directions before following them to verify this is the correct resolution for your business.
We are going to start by creating two separate items. The first item is going to be the Vehicle Item.
The second item we are going to create is an Interest Item.
Now, we need to sell the customer these items.
Note: If you are not sure how to create a customer, search the in product help for ‘add a customer’. This will give you results on the different processes in place for creating customers.
The loan is now recorded. At this point the customer owes you the entire amount of the loan. To receive payment on the loan:
Your customer balance reports will now reflect the loan as well as the payments.
This method does not include calculations for Sales Tax. If you are in a state that requires a Sales Tax charge on items or interest you will need to contact your accountant for assistance with that set up.