If your client has made a loan to someone and is receiving either regular or lump sum repayments, this can be recorded in the Debts & Loans section of AdviserGo as follows:
1. Open the client record in AdviserGo, if it is not already open.
2. Click/tap the plus button in the bottom right corner of the Dashboard screen.
3. Click/tap Debts & Loans in the Finances and Accounts section of the menu which appears.
4. In the Debts & Loans screen which appears, click/tap Loan.
5. Complete the relevant details in the Basics screen, any field marked with an asterisk is mandatory.
- In Lender select the person making the loan
- In Borrower select the borrower if they are a person in the plan or select Outside of Plan if they aren't. Tip-The loan repayments don't show as an income if you select a person in the plan as the borrower because the software treats it more like a transfer. So if you do want to show the repayments in cash flow, then choose Outside of Plan.
- In Name input a description of the loan, this is what will appear on reports.
- In Type select Existing Loan for a loan which is already in place or Future Loan for a loan which has yet to be made.
- In Loan Start Year (existing loans only) input the year the loan was made.
- In Balance input the amount of the loan which is outstanding at the start of the plan for existing loans. For future loans, input the amount which will be loaned.
- In Interest Rate input the interest rate being charged on the loan. The default is 0%.
- In Payment Amount input the amount which is being repaid. If there are no regular repayments, or they will start at a future date, set the payment amount to £0 initially and then use either Steps or One Time Payments to set the repayments up (see steps 7 and 8 below).
Example of existing loan:
Example of future loan:
6. For Future Loans only: click on Timing in the left hand menu to set when the loan will be made. Click on the event in the year the loan will start. If you don't already have an event for the relevant year, double-click on the bar of the chart for the relevant year and you can add a new event. Click Set as Start Event.
7. Optional step if the interest rate or repayments will change at some point in the future: click Steps in the left hand menu, then click Add Step.
To change the interest rate, click the slider next to Interest Rate so it is no longer greyed out and then input the new interest rate.
To change the Payment amount, click the slider next to Payment so it is no longer greyed out and then in Amount input the new payment amount and frequency of payments. Set the Escalation Rate to the relevant percentage. The default is 0% which will keep repayments level.
Then click Timing on the grey bar along the top of the step box and select the event in the year in which the change is to take place. If you don't already have an event for the relevant year, double-click on the bar of the chart for that year and you can add a new event. Click Set as Step Timing. Then click Save.
8. Optional Step if lump sum repayments will be made. Loans will continue in the plan until fully repaid at which point the receipt of the repayments will stop. If no regular repayments are being made and the loan will be repaid in one or more lump sums, model this by clicking One Time Payments in the left hand menu.
Then click Add One Time Payment.
In Basics, select Payoff in the Type box for a total repayment or select Specified Amount for a partial repayment of the loan. For partial repayments input the amount to be repaid in the Amount field. In Payment Timing select whether the repayment will be made at the end of the plan year or the start of the plan year.
Example of a total repayment at the end of the plan year:
Example of a partial repayment at the start of the plan year:
Then click Timing on the grey bar along the top of the one time payment box and select the event in the year in which the repayment is to take place. If you don't already have an event for the relevant year, double-click on the bar of the chart for that year and you can add a new event. Click Set as One Time Payment Timing. Then click Save.
You can add multiple lump sum repayments if required by repeating these steps.
9. Click Save.
Where can I see details of the loan and the repayments?
View the cash flow chart in either the Dashboard or the Let's See screen. Click the Details button.
For existing loans you should see the loan payments as inflows with a spike in the cash flow (but not the need line) indicating a lump sum repayment coming in to the plan.
For future loans you should see you should see a spike in the need line in the year the loan is made showing the amount of the loan going out of the plan. The loan payments show as inflows with a spike in the cash flow (but not the need line) indicating a lump sum repayment coming in to the plan.
Switch to the Assets chart and you'll see that the loan shows as an asset. The value of the loan asset reduces over time as it is repaid.
Click on the Year View button and click on Debt to see the numbers behind the charts. Use the slider beneath the chart to select which year to view.
NB- Any surplus from these loan repayments is saved swept into a Cash Sweep account and not assumed spent.