How to enter Hire Purchase payments in Xero

In this video I show you how to enter Hire Purchase payments in Xero.

As always, I share some tips …

💠 How to enter the asset purchase from the deposit

and

💠 How to save time by setting up a bank rule

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During a Zoom call we can review your hire purchase agreements, and check that you have them all set up in Xero properly.

[Ricard]

Brilliantly simple explanation. Thank you!

[adamnicholas]

Thank you! I've read so many forum posts about this and completely failed to grasp it properly - but this explains everything so clearly. Thanks again

[amandabayley]

Thank you for taking the time to post these. I have just discovered you and have already learnt so much. I will be making sure to watch your other videos!

[jkyle]

Thank you so much for making this video, saved me from being in a mess later on in a year. Great work, will definitely check all your videos.

[seanyb]

brilliant videos, this helps me put some kind of 'loan' amount on xero for my mobile phone and laptop

[dimitri]

Thank you so much for the extremely helpful videos! I've been a fan for a while now. I had a question. In my case there was an order fee (£200), followed by a down payment (£10, 000), followed by the HP payments. I'm trying to figure out how to adapt this to my case, but I'm not sure how to treat the 2nd payment. Also, the first 2 payments were to the car company (Tesla), but I assume the HP payments (haven't paid the 1st one yet) will be to the car finance company (Black Horse), but I can only put one company in the "to" field in Xero.

[ranieliah]

great tutorial. I was wondering what about at end of fin. year and you need to show interest paid on P&L?

[mehdijaanam]

Hi, I had seen this video before posting the purchase invoice for the full balance. So I posted the deposit against the supplier invoice. When the first direct debit was paid I started posting that directly into hire purchase and hire purchase interest nominals. At the end of first year my supplier balance was still same as there were no payments allocated against that. How can I correct it and what entries would I need to make?

[s.willfd]

What would the Xero coding be for just hiring a van for a couple of days to move some equipment?

- motor vehicle expenses?
- general expenses?

Bit confused!

[AnxiousAmoeba]

This is very informative, Are you also able to confirm how to deal with the VAT charged in Xero?

[skhudy]

I have a 2 year HP agreement on machinery with VAT also applicable - how is this accounted for?

[jamesbarker]

what about PCP where you don't own the vehicle unless pay the baloon, so just a lease until then with no ownership so no capital to be claimed
?

[TheBelive]

Hi in each payment £275 (monthly)
You record 250 ( loan)
You record 25 (interest)
How do you work out interest 25 and capital loan 250?
My lender give me a monthly payment including interest (487) but don’t tell me how much interest in it .
Thanks again