How to Setup a Credit Line Bank Account in Sage?

There are times and cases when we need money, but are unsure of the amount required. While a personal loan might be an answer in most cases, not knowing the exact amount can complicate things further. This is where the ‘Credit Line’ or a ‘Line of Credit’ comes into the picture. Let’s look at how to setup a credit Line Bank Account in Sage?  

So, what is a Credit Line Bank Account? Essentially this can be considered a ‘revolving’ loan that allows the user to access the money as required till a certain limit. Once the money is repaid, the same limit can be borrowed once again. 

In a way, this can also be stated as a ‘Flexible loan’ from a Bank or any reputed financial institution. However, much like the Credit card limit, the Credit line is a defined amount of money that the client can access as and when required. Here, you can repay the amount that has been used immediately or over time. Similar to the loan, the Credit Line also requires you to pay Interest. Also, the borrowers need to be approved by the bank where the Credit Ratings and your relationship are approved by the banks among certain other factors. While the line of Credit is lower-risk as compared to the Credit card, however, these are not as common. 

There is a fine difference between a Credit line and a Personal loan; the interest line is quite variable. This implies the fact that the interest rate can change as broader interest rates change. Hence, this can make borrowing money difficult to predict, as you do not know what it can end up costing you.

However, there are a few benefits of the Line of Credit:

• These are beneficial when you do not know the costs straight up
• The credit line is useful for some big expenses like a wedding or home development
• Can also be a part of the overdraft protection plan.

Also Read: How to Setup New Bank Account in Sage 50

Here we go!

Procedure to Setup a Credit Line Bank Account in Sage 50

It’s simple! You can simply setup a credit line account just like any other bank account. You can then name it accordingly. Here are the steps to follow-

• Navigate to Chart of Accounts 
• Create a new bank account 
• Make sure to keep the Account Class as Bank.
• Mark the Account as Credit line account.
• You may also select to make regular payments from this account 
• If you want to transfer money between this account and other bank accounts, follow the steps  below-

• Click  on  the Banking tab
  • Click the tab named Transfer funds.
  • You can click on the Transfer from /Transfer to bank name as you require 
  • Enter the amount as desired.
• Click on Process.

Please Note: this asset account will most likely show a negative value

Set a Customer’s Credit Limit in Sage 50

If you need to set up Credit limit in Sage 50, here are the steps to follow:

• Go to the Customer Record
• Open the Statistic tab
• Go to the Credit Limit 
• Here, type an amount 
• Click on Save 
• Click on Close

Also Read: Sage 50 Direct Deposit Payroll

Final Words:

We hope the sequential steps mentioned above have helped you a great deal to setup a credit line bank account in Sage 50. If you are still experiencing any difficulties in carrying out the above-mentioned steps or if you have any more queries, we would recommend you to speak to some of the authorized Sage experts. 

Frequently Asked Questions(FAQs)