This article applies to non-bank finance excluding leases. For example, where you source finance from the car / truck dealership.
For a Bank Loan refer to: Record a loan in General Ledger. However, this article will still be of use in this case for recording the asset side of the transaction. For leases, generally all payments are expensed.
Also note that Attaché Support cannot step you through this whole process. The process below is meant as a guide only and describes a generic accounting procedure as applied in Attaché software. If you have queries as to whether this process applies to your situation, you should speak with your accountant. Attaché Support cannot offer advice as to whether this procedure is applicable to your situation. However, we are happy to assist you with individual steps if you or your accountant has determined that this process is applicable to your situation.
Factors to consider when entering a new financed vehicle into Attaché
The steps required may vary depending on the circumstances. Factors to consider include:
Do you use Attaché Asset Management or other asset management software?
Was there a trade-in of an existing vehicle? If so, what was the consideration?
How do you correctly pick up GST on the purchase.
What type of finance is involved?
What year was the vehicle purchased in and have you rolled to a new year since then?
this article does not consider this situation, if you are in this situation and are not sure what to do, Please raise a new case online and reference the title of this article.
Do you know the Effective Life / Depreciation Rate for the new car? Your external accountant may handle this.
Is there any private use of the vehicle? This could have tax implications.
Ensure you have the following documents on hand
A detailed Purchase Contract for the purchase of the new vehicle.
The tax invoice for the purchase.
The finance documents including the Repayment Schedule.
The Repayment Schedule is required for any non-bank finance where you are paying a set repayment amount regularly.
The schedule will break down the components of each payment you make.
You will need the Repayment Schedule to correctly enter your repayments.
Steps to enter a new financed vehicle
You will need at least the following General Ledger accounts already set up in Attaché:
📌Note: Essential settings for Debit/Credit and End of Year Indicators are listed in square brackets below. Ensure each account has an Add-to Account 1.
An Asset at Cost account [Debit, Retain].
You probably already have one of these if the business has previously held a vehicle.
🤓Tip: Run your Chart List to find what accounts you have at: General Ledger, Reports, Details, Chart List.
An Asset Accumulated Depreciation account [Credit, Retain]. Typically added immediately following the Asset at Cost account in your Chart List.
Various expense accounts including [Debit, Reset].
Registration.
CTP.
Interest Paid / Charges.
Finance Charges.
Loan Account [Credit, Retain]. Typically placed in the Non-Current Liability section of your chart.
Unexpired Charges Account [Debit, Retain]. Typically added immediately following the Loan Account in your Chart List.
To set up a new GL account, see: Create a new General Ledger Account code.
Collect and balance the numbers using the documents
Open Excel or another spreadsheet program.
Add seven (7) column headers:
GL Account Description.
GL Account Number.
Asset / Expense.
Liability.
Document.
GST.
Line Total.
Under the headers you'll need at least the following GL Accounts:
Cost Incl. GST (could be Vehicles at cost OR the Additions Clearing account if you use Attaché Asset Management).
Cost Excl. GST
Rego.
CTP.
GST.
Loan (it is best to describe the loan, eg: XYZ Truck Loan).
Loan Unexpired Charges.
Fees and charges on loan.
Finance Dealer fees.
Additional rows may include:
Disposals Clearing account (for a trade in when Attaché Asset Management is used).
Profit / Loss on Disposal (for a trade in when NOT using Attaché Asset Management (posting the remaining asset value to this account is not covered by this article).
Add the GL Account number for each row in the Account Number column.
📌Note: if you use Attaché Asset Management, the Cost row/s should be coded to the Additions Clearing account.
Obtain the Purchase Contract from the dealership, there should be a detailed schedule listing all items purchased on the left and all settlement details on the right.
For each number on the Details of Purchase (left) side of the Purchase contract, allocate it to a row in your spreadsheet, eg:
Add Vehicle Price to the Cost row.
📌Note: this is the cost of the vehicle and will be an asset for the business so add the price to the Asset / Expense column.
For extras like vehicle 'Optional extras' or 'Additions', also freight and stamp duty, add these to the 'Cost' as well either by:
adding to the same row by adding the numbers up in the same cell in the Asset / Expense column, eg: "=+80000+14000+2000-4000", Excel will total this to $92,000, note a discount of $4,000 was subtracted, refer Screenshot 1 below, or
adding separate cost rows and entering each cost component to the Asset / Expense or Liability row for a discount or other reduction to the total cost.
Add Rego, CTP and GST on the vehicle to their relevant rows.
When you've added all the numbers from the Details of Purchase side, the total of the Asset / Expense column should match the total on the contract, in the example, the total for the vehicle purchase was $106,604.
For each row that applies to the Purchase Contract, add 'Contract' in the Document column. Refer to the Workings Screenshot below.
To prepare for supplier invoice entry, allocate the GST among the lines. For example, Stamp Duty will not have GST, the cost of the car otherwise should include GST. Registration may vary, etc.
Calculate the Supplier Invoice Line Total as the Asset/Expense + GST, the total of these lines should equal the contract total, in the example $106,604.
Now refer to the finance documents, firstly look for the total payments, if you cannot find a single number for this you could use the repayment multiplied by the number of repayments and add this to the Vehicle Loan in the Liability column. If there are fees per payment, these may need to be added as well if the full repayment is not specified.
The finance documents should also say the total interest that will be charged, add this to the Vehicle Loan - UC row in the Expense column. Fees per repayment would also be added to the Vehicle Loan - UC row as an Expense.
Lastly any finance fees and charges or finance dealer fees for setting up the loan may need to be added in the Expense column to the relevant rows.
You should find that after adding all the numbers the total of the Asset / Expense column (Debits) will equal the total of the Liability column (Credits), refer to the Workings Screenshot. Also, the total of Contract amounts is offset by the total of the Finance amounts.
Add the document that you collected the finance numbers from in the Document column, e.g.: Finance or Schedule, etc.
You may wish to include additional Details/Notes for each finance line as shown.
Workings Screenshot:
Post the financed purchase in Attaché
To Post the financed purchase in Attaché, you make entries according to the documents you have noted in the above spreadsheet, as follows:
Suppliers: The Purchase Contract will have a Tax Invoice associated with it; therefore, you enter this as a Supplier Invoice.
Each row will correspond to a line in the invoice, except for GST which is added to the lines it applies to.
Ensure the GST matches the Purchase Contract / Tax Invoice.
Note that the GST code used should be your Capital Acquisition or equivalent code.
Ensure the total of the supplier invoice matches the Tax Invoice / Purchase Details in the Purchase Contract.
Refer to the Supplier Invoice Screenshot below.
General Ledger: Finance on the vehicle needs to be entered as a General Journal.
Enter the Asset / Expense column as debits.
Enter the Liability column as credits.
Obviously, this will not balance, you need to add a further balancing debit to a 'Clearing Account' such as Suspense or similar.
Refer to the General Ledger Journal Screenshot below.
Suppliers: Pay your Supplier Invoice.
Enter a Supplier Manual Payment.
On the first screen, tick the Override G/L Bank Acct option and enter the Clearing Account used in step 2 above.
If this tick box is unavailable, go to Setups, Suppliers, Options, Supplier Options and tick Multiple Bank Accts
The contra account will need to be a Bank type GL account. If the account you want to use is not listed, then go to General Ledger, Masterfiles, Accounts, Maintain and set the Account Type of the GL account you want as the contra account to Bank. Remember to change it back again after you complete entry of the payment.
Allocate the payment to the purchase Tax Invoice.
Supplier Invoice Screenshot:
General Ledger Journal Screenshot:
Possible additional steps to enter a financed vehicle
Asset Management: Enter the sale of any existing vehicle that was traded in. The net value of the trade in will go to the Disposals Clearing Account.
Asset Management: Enter the new vehicle as an addition and activate the new asset.
Making Repayments
When you make a repayment, how you enter it depends on whether it has a GST component and if you use the Attaché BAS / GST Return feature to prepare your BAS / GST Return:
Payment Includes GST and you use the Attaché BAS / GST Return feature: Enter a Supplier Invoice then a Supplier Payment.
Payment has GST but you do NOT use the Attaché BAS / GST Return feature: Use General Ledger, Transactions, Payments
Payment has no GST: Use General Ledger, Transactions, Journals.
This method could be used for item b as well except you'd need to manually pick up and code GST as a separate line.
Each repayment should be coded to the Vehicle Loan (86100 in our example) account in all methods. Additionally in this entry:
Debit Interest Expense for the interest applicable to that payment, refer to the Repayment Schedule.
Credit the same Interest Expense value from the Vehicle Loan - UC account (86101 in our example).
Other costs and charges could also go to Interest Paid or a separate account and similarly the credit to the Vehicle Loan - UC account.