Recording Intercompany Loans

Question: Say company A makes a loan to company B. I would like to know if there are different ways of recording it in the MYOB software. Do I go through Banking–> Spend Money–> and mention it is a loan to company B in the memo, in the books of company A and go through Banking–> Receive Money–> and also mention that it is a loan from company A in the books of company B? Please I really need an answer for this question. I would also like to know if there might be another way of dealing with this transaction?

Answer: As you have seen, company loan transactions can be confusing! In the example you give you need two separate MYOB company files. In the Company A file, create an Asset account called “Company B Loan”. Use Spend Money to record the transaction to this new account, describing the loan in the Memo. In the Company B file, create a Liability account called “Company A Loan”. Use Receive Money to record the transaction to the new account, again describing the loan in the Memo. At all times you should be able to match the balance of the Asset account in Company A with the Liability account in Company B.

You should (regularly) reconcile the accounts to check they agree! Suggest you use the bank reconciliation screen to do the rec.

Lynley Averis

Lynley is an MYOB Certified Consultant & has been involved in training in New Zealand since 1985. She's written various accounting & MYOB workbooks including co-authoring “Bookkeeping for Dummies”. She has consulted on all versions of MYOB Accounting, Retail and Payroll over the past 18 years and has previously worked for MYOB. She currently consults to NZ businesses on all aspects of business systems - her mission for clients is for them to spend as little time as possible doing accounting!