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RPM: LOAN MANAGMENT

How To: Set Up and Use the Feature - Loan/Note Tracking

Introduction

This guide explains how to configure and use the RPM Loan Management module in Microsoft Dynamics 365 Business Central. The module gives finance, accounting, and operations teams a single place to create loans (notes), fund them, process periodic payments, and record payoffs — all tied directly to your vendors, equipment units, and the general ledger.

Part One covers the one-time setup an administrator completes before loans are created. Part Two covers the day-to-day tasks users perform once the module is configured. Short notes throughout point out validations and behaviors you will encounter along the way.

Who should use this guide

  • Finance and Accounting — configure default posting rules and general ledger accounts for loans.
  • Operations — associate equipment purchases with the loans that finance them.
  • Management and Auditors — review loan activity and confirm postings are accurate and auditable.
  • Loan (Note) — A record representing money borrowed to finance an equipment purchase. Each loan carries its own lender, principal, interest rate, term, and general ledger accounts.
  • Master Loan — A grouping record that combines several child loans from the same lender so they can be paid together in a single posting. A Master Loan holds no financial detail of its own.
  • Lender — The organization that provided the financing. Every lender is set up as a Vendor so that payments flow through standard Business Central vendor processing.

        Key concepts

               

              Part One — Initial Setup

              Complete the following once, before creating any loans. Setup is typically performed by a system administrator or finance lead with permission to edit setups.

              Step 1 — Set up lenders as vendors

              Because all loan payments are processed as vendor payments, each lender must exist as a Vendor before it can be selected on a loan.

              1. Open the Vendors list.
              2. Create (or confirm existence of) a vendor record for each lender that finances your equipment.
              3. Complete the vendor's payment details — payment terms, payment method, and remit-to information — as you would for any other vendor.
              4. Open RPM Loan Setup (use the Business Central search icon to find it).
              5. Assign the Number Series that automatically generates a unique, sequential Loan No. for each loan.
              6. Set the default Interest G/L Account used to record interest on payments and payoffs.
              7. Set the default Loan Liability Account — the general ledger account that holds the outstanding loan balance.
              8. Set the default values to be used for new loans. These include Default Interest Rate (%), Default Term (Months) and Default Loan Lender.
              9. Set the Journal Templates and Batches to use for the Payment and Purchase Journals.
              10. Open the RPM Loan list and choose New to open a blank Loan Card (use the Business Central search icon to find it).
              11. Confirm the Loan No. (assigned automatically from the number series).
              12. Enter the Unit No. for the equipment or asset the loan relates to.
              13. In Lender No. field, leave the default vendor or use the lookup to select the vendor that provided the financing. Only valid vendors can be chosen.
              14. Enter the Loan Amount, confirm or modify the Interest Rate (%) and Term (Months), and enter the Start Date.
              15. Confirm or adjust the Interest GL Account and Loan Liability Account (defaulted from RPM Loan Setup).
              16. The loan is now ready to be funded.
              17. Press the Fund Loan button in the ribbon to create the necessary G/L entries.
              18. Open the Posted Purchase Invoice for the equipment purchase.
              19. From the Line ribbon, choose Posted Subcat Acq. Lines.
              20. Select the checkbox to Create Loan for one or more units on the Posted Subcat Acq. Lines page.
              21. Ensure the Lender, Loan Amount, Loan Interest Rate (%), Loan Term (Months), Loan Start Date and Master Loan No. (if applicable) are all correct.
              22. From the Ribbon, press Create Loans.
              23. The system creates a separate Loan Card for each selected unit and automatically fills in the Unit No., the Loan Amount (matching that unit's line value on the invoice), and the default general ledger accounts and settings from RPM Loan Setup.
              24. After creating the loans, the system will create the Loan Funding journal lines in the payment journal and will ask if you want to open the journal.
              25. Answer yes to open the journal then proceed to post the journal.
              26. Open the RPM Master Loan List.
              27. Enter a No., a Description and Select the Lender.
              28. Move off of the line to save the Master Loan record.
              29. Open the child loan you want to include (or create it).
              30. In the Master Loan No. field, use the lookup and select the Master Loan. The lookup lists only loans flagged as Master Loans.
              31. The system checks that the child loan uses the same lender as the Master Loan.
              32. Open the Loan Card you want to fund.
              33. Choose Fund Loan from the ribbon.
              34. Select the appropriate funding source, either Offset to G/L Account of Apply to Vendor Invoice.
              35. Select the Offset G/L Account to use or the Vendor and its associated Invoice to apply against and press OK.
              36. The system creates a two-line Payment Journal entry: a debit to the vendor invoice (accounts payable) for the related purchase or the G/L Account depending on which funding source you chose, and a credit to the Long-Term Loan account from the loan card.
              37. Review the journal for accuracy.
              38. Post the journal. The loan is now marked Funded and the original accounts payable entry or G/L entry is cleared.
              39. Open the active, funded Loan Card.
              40. On the Payment Schedule line, choose to use the Scheduled Payment amount or enter in the payment you would like to make for the first payment due.
              41. Press the Post Schedule Line ribbon and choose Process Payment.
              42. The system generates a three-line journal entry: a debit to Interest Expense, a debit to Long Term Loan (principal portion), and a credit to the Vendor (lender) for the total payment.
              43. The resulting vendor invoice appears in the Payment Journal, where it is paid using your normal vendor payment run.
              44. After payment, the loan's payment history is updated with the payment details.
              45. Note: if you made a mistake on any payment, you can undo the payment from the Post Schedule Line ribbon.

                    Note: The Loan Card and RPM Loan Setup pages have no Bank Account field. Banking details live on the lender's vendor record, and all payments are made to the lender through that record.

                    Step 2 — Configure the RPM Loan Setup page

                    The RPM Loan Setup page holds the default values applied automatically each time a new loan is created. Setting these once reduces manual entry and keeps postings consistent.

                                Note: Complete this step before funding any loan. If the default GL accounts are not set, the funding process returns a configuration error. Values entered here are defaults only and can be adjusted on an individual Loan Card when a specific loan needs different accounts.

                                 

                                Part Two — Using Loan Management

                                Once setup is complete, users can create loans, group them, fund them, process payments, and record payoffs. The sections below follow the typical life cycle of a loan.

                                Creating a loan manually

                                Use this method to enter a loan directly, for example when financing an asset that did not originate from a posted purchase invoice.

                                                Note: A Lender is required on every loan. The card cannot be saved without one.

                                                Creating loans from a posted purchase invoice

                                                When equipment is purchased and the invoice is posted, you can generate loans directly from that invoice — the fastest way to keep loan amounts aligned with what was actually purchased.

                                                                Note: Select multiple units to create several loans in one pass — one Loan Card is created per unit selected.

                                                                Working with Master Loans

                                                                A Master Loan lets you combine several loans from the same lender so they can be paid together in one posting. This is useful when a single lender finances multiple units and you want a single, consolidated payment.

                                                                Creating a Master Loan

                                                                      Associating child loans

                                                                            Note: All loans grouped under a Master Loan must share the same lender. If the lenders differ, the system shows a validation error and the association is rejected. Repeat these steps for each loan you want grouped.

                                                                             

                                                                            Manually Funding a loan

                                                                            Manually Funding a loan reclassifies the equipment's accounts payable or GL loan balance as a long-term loan. This tells Business Central that the purchase is now financed rather than owed as a standard payable.

                                                                                          Note: A loan can only be funded once. Attempting to fund an already-funded loan is blocked.

                                                                                          Processing loan payments

                                                                                          Loan payments are recorded through a Purchase Journal rather than a direct bank payment. This produces a vendor invoice to the lender that then flows through your standard payment process.

                                                                                          Note: A loan must be funded before it can be paid. The payment action is not available on an unfunded loan.

                                                                                          Paying a single loan

                                                                                                        Paying loans grouped under a Master Loan

                                                                                                        When you process payment against a Master Loan, the module handles the grouped loans together:

                                                                                                        • All eligible child loans with the same lender are consolidated under the Master Loan.
                                                                                                        • Three-line journal entries are created for teach of the loans that are part of the Master Loan.
                                                                                                        • Each included loan is automatically updated so individual balances stay accurate.

                                                                                                              Note: A later payment run skips loans that are already paid, so the same loan is not paid twice within a Master Loan group.

                                                                                                              Paying off a loan

                                                                                                              Use Payoff Loan to close a loan early or at maturity. The module calculates the interest owed through your chosen date and posts a single closing entry.

                                                                                                              1. Open the Loan Card and choose Payoff Loan.
                                                                                                              2. Enter the Payoff Date. The system calculates accrued interest through that date.
                                                                                                              3. The system creates and posts a three-line journal entry: a debit to Interest Expense for the accrued interest, a debit to Long-Term Loan for the remaining principal, and a credit to the Vendor (lender) for the total payoff amount.
                                                                                                              4. The loan is marked Paid Off and is automatically excluded from future payment runs.

                                                                                                                      Note: Payoff applies to individual loans, not Master Loans — the option is not available on a Master Loan. A loan that is already paid off cannot be paid off again.

                                                                                                                      Reporting and audit

                                                                                                                      The module provides reporting so finance and audit teams can review loan activity at any time:

                                                                                                                      • A loan portfolio view of active, funded, and paid-off loans.
                                                                                                                      • A Master Loan summary showing each Master Loan and its related child loans.
                                                                                                                      • Loan funding and payoff history.

                                                                                                                            Every funding, payment, and payoff posting is recorded with its journal entries, timestamps, and user IDs, and each loan links back to its related posted journals — providing a complete audit trail from loan creation through closure.

                                                                                                                             

                                                                                                                            Quick Reference — Loan Life Cycle

                                                                                                                            The typical order of operations for a loan is:

                                                                                                                            1. Set up the lender as a vendor and configure RPM Loan Setup (one time).
                                                                                                                            2. Create the loan — manually or from a posted purchase invoice.
                                                                                                                            3. Optionally group related loans (same lender) under a Master Loan.
                                                                                                                            4. Fund the loan to reclassify the payable as a long-term loan.
                                                                                                                            5. Process payments over the life of the loan (individually or by Master Loan group).
                                                                                                                            6. Pay off the loan to close it and stop future payment runs.