How do I track debts and loans for disclosure reporting?

Properly tracking debts and loans is essential for accurate financial disclosure reporting. Regulatory agencies require detailed information about money your organization owes to vendors or has borrowed from lenders. These obligations must be reported even before they're paid, making them different from regular disbursements. Setting up proper debt and loan tracking helps ensure compliance with reporting requirements while giving you a clearer picture of your organization's financial obligations. This systematic approach prevents surprises when preparing your disclosure reports. 

Step 1: Access the debts and loans section 

Navigate to the Compliance or Disclosure section in EveryAction through the main menu. Look for options labeled "Debts," "Loans," or "Obligations" and select the appropriate category for the item you need to track. The system typically separates regular vendor debts (money owed for goods and services) from formal loans (money borrowed with repayment terms). If you don't see these options, check with your administrator as you may need specific permissions to access the financial tracking features. Depending on your system configuration, these functions might also be accessible through the Finance section. 

Step 2: Record a new debt 

To record money owed to a vendor, click "Add Debt," "New Debt," or a similar button in the debts section. Complete the form with required information, starting with selecting the vendor from the dropdown list or creating a new vendor record if needed. Enter the date when the debt was incurred (typically the invoice date or service date), the total amount owed, and a clear description of the goods or services provided. Select the appropriate debt category based on your reporting requirements—common options include consulting fees, advertising costs, event expenses, or administrative services. Add any additional information required by your specific disclosure reporting rules, such as election designation or campaign allocation details. 

Step 3: Track a new loan 

For formal loans with defined terms, navigate to the Loans section and click "Add Loan" or "New Loan." The loan form typically requires more detailed information than regular debts. Enter the lender's information (either select from existing records or create a new entry), the loan date, the principal amount, interest rate, and due date. Specify whether the loan is secured (backed by collateral) or unsecured, and if secured, describe the collateral. Document the loan terms, including payment schedule and any special conditions. If the loan comes from a financial institution, you'll usually need to confirm it was made in the ordinary course of business at a standard interest rate. For loans from individuals, additional reporting requirements may apply depending on your regulatory framework. 

Step 4: Record payments against debts and loans 

When you make payments toward existing debts or loans, you need to record these transactions properly to maintain accurate balances. To record a payment, first create a disbursement record following your normal process (as described in the disbursement management article). During this process, look for an option to link the disbursement to an existing debt or loan. This might appear as a dropdown field labeled "Apply to Debt/Loan" or a checkbox option to "Pay existing obligation." Select the appropriate debt or loan record to connect the payment. The system will reduce the outstanding balance accordingly. For loans with interest, you may need to specify how much of the payment applies to principal versus interest. 

Step 5: Monitor outstanding balances and reporting requirements 

Regularly review your debt and loan records to ensure accurate reporting. Navigate to the debt and loan sections and look for reporting options that show outstanding balances and payment histories. Pay attention to aging reports that flag long-standing debts, as extended payment terms might trigger additional reporting requirements in some jurisdictions. Before each reporting period, verify that all current obligations are properly recorded in the system. Remember that most regulatory agencies require reporting outstanding debts and loans even if no payments were made during the current period, so these obligations will continue to appear on your disclosure reports until fully paid off. If a debt is forgiven or a loan is converted to a contribution, document this change using the appropriate system tools, as these transactions typically require special reporting. 

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