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.
Step 1: Create Items
Step 2: Sell the item to a customer
Note: The loan is now recorded. At this point the customer owes you the entire amount of the loan.
Step 3: Receive payment for the loan
Note: 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.