Loans
How to record loan payments correctly so your books stay accurate and your Balance Sheet reflects what you actually owe.
Loan payments need special handling in Kick because each payment is made up of two parts - principal (reducing what you owe) and interest (an expense). If you record the full payment as a single expense, your books will overstate your costs and your Balance Sheet won't reflect the correct loan balance.
This is one of the areas where working with an accountant or bookkeeping partner makes the most sense, especially if you have multiple loans or years of history to catch up on.
Why it matters
When you make a loan payment:
The principal portion reduces your liability on the Balance Sheet - you owe less
The interest portion is an expense that appears on your P&L
Recording both correctly keeps your Balance Sheet accurate (showing what you actually owe) and your P&L honest (showing only the real cost of borrowing, not the full payment amount).
What you need
Before setting up loan accounting in Kick, you need your amortization schedule - the breakdown of each payment into principal and interest. Your lender provides this, usually at loan origination or available in your online account portal.
How to record loan payments
If your lender sends separate line items for principal and interest, categorize each one directly to the right account.
If payments come through as a single amount, use Splits to divide the payment:
Open the loan payment transaction
Click Split
Allocate the principal portion to your loan liability account
Allocate the interest portion to your interest expense account
Reference your amortization schedule for the exact breakdown
To automate this for fixed payments (like a fixed-rate mortgage or car loan where the split ratio is consistent), set up a Split Rule. Kick will split the payment automatically every time it syncs.
Recording loan proceeds
When you receive a loan, the funds coming into your bank account are not income - they're a liability. Categorize the deposit to your loan liability account so it appears correctly on the Balance Sheet, not on your P&L.
Multiple loans
Keep separate accounts for each loan so you can track balances and payments independently. Your accountant can set these up in your Chart of Accounts.
When to bring in a partner
If you have multiple loans, years of history to catch up on, or you're unsure about your amortization schedule, this is work worth handing off. A bookkeeping partner can set up the accounts, enter historical payments correctly, and reconcile each loan to your lender statements.
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