BrittneyB said:

I'm not sure how to record the transactions correctly or what is the best (easiest) way to record it? As well as transferring money to the LOC account to pay it back from the chequing account.

The usual bank fees and adjustments can be recorded through the General Journal, by a payable invoice, or through the reconciliation module once it's set up.  Transfers are easiest to record using the banking module's 'Transfer Funds' feature.

My personal preference is to use daily recurring transactions set up in the General Journal for the transfers, and monthly (and annual) recurring entries for the interest and annual fees.  I always re-save the transaction each time, it helps avoid entering the payment twice.

I find entering the bank charges in separate tabs of the reconciliation more work than using the G/L, and Sage's hiding 'Income' and 'Expense' transactions from the Transactions tab is just confusing.

BrittneyB said:

I'm not sure how to record the transactions correctly or what is the best (easiest) way to record it? As well as transferring money to the LOC account to pay it back from the chequing account.

The usual bank fees and adjustments can be recorded through the General Journal, by a payable invoice, or through the reconciliation module once it's set up.  Transfers are easiest to record using the banking module's 'Transfer Funds' feature.

My personal preference is to use daily recurring transactions set up in the General Journal for the transfers, and monthly (and annual) recurring entries for the interest and annual fees.  I always re-save the transaction each time, it helps avoid entering the payment twice.

I find entering the bank charges in separate tabs of the reconciliation more work than using the G/L, and Sage's hiding 'Income' and 'Expense' transactions from the Transactions tab is just confusing.

Thank you for your answer! That helped a lot. Another question I have is, if the LOC account is a personal bank account for the company's owner but they have transferred numerous amounts of money to the company account. Would you still make the LOC a bank account or what would be the best way to enter into the company's sage program?  

BrittneyB said:

Would you still make the LOC a bank account or what would be the best way to enter into the company's sage program?

Since the account is in the owner's name, if the company is incorporated as a separate legal entity then this is a shareholder's loan.  It doesn't matter whether the money is coming from their LOC, their cheque account, or their rolled spare change, it's not a company liability to the bank, it's a liability to the shareholder.

If there are a lot of transfers, you could optionally set the shareholder's loan account(s) as 'bank account' type to enable 'bank transfers' easier.  Or, use recurring transactions in the G/L.

If you have to keep track of ALL transactions in the LOC bank account, and they are all transactions to and from the company, then you could set the shareholders' account up for reconciliation.  (Sage 50 allows reconciling most accounts, even if they are not bank accounts)

I hope that helps, please post back!

Ok that makes sense! I have a bank account set up for "Loans to / from Shareholders" So could I just directly transfer funds from the shareholder account to the chequing accout? That would probably be the easiest if I understand correctly. Because I wouldn't have to worry about interest or anything since the only thing I need to do is reconcile the chequing account. 

That should work!

If you have multiple shareholders' loans, you could set each one as as a subgroup account, with a subgroup total.