Can I issue a loan to someone else through ExpensePlus?

Yes, you can issue a loan and record this in ExpensePlus, however it is questionable as a charity whether you should be doing this. I.E. is it agreed by your trustees that it is in alignment with your charitable purposes and correct use of your charitable funds to do this. If in doubt, please consult your auditor, independent examiner, or the charity commission. This is increasingly vital where the recipient of the proposed loan is a trustee or a connected person to a trustee.

The best method to record a loan (from your charity to an individual or external organisation) is to issue an invoice for the full amount of the loan at the point that the funds are provided. This will create an Accounts Receivable (debtor) record on your balance sheet, which will decrease every time a payment is received and reconciled as a 'part-payment' towards the outstanding invoice balance.

The outstanding loan balance can be tracked within the Invoicing module, viewed by the customer.

How to reconcile the expense of providing the initial loan funds:

If your organisation is providing a loan to an individual or external organisation, the initial payment of funds will be shown as an expenditure transaction and needs to be reconciled. For simplicity, we advise recording this expense in its own category called 'outgoing loans' or equivalent'. If the loan is expected to be repaid within the same financial year, you could reconcile this 'income repayment' (a -ve transaction) through an income category. If you then issue your invoice (as above) from the same category, they will balance each other out at the point of repayment, or otherwise show as a debtor. If the loan is provided on a longer-term basis, you may want to account for the expenditure and income separately. Please consult your independent examiner or auditor for advice.