Context: The Loan Matrix is often used in practice to view, at a glance, what the loan balances are as per each entity's accounting file. This matrix can therefore highlight if there are any discrepancies and alert the accountant to investigate further.
Please refer to the Glossary for definitions of key terms used in this article.
How to insert the loan matrix
While in a binder in the browser, add the Inter-Entity Loan Matrix against a related party loan account. To do this, add the Inter-Entity Loan Matrix as you would any other workpaper template (you can search for the matrix in the search bar).
For more information regarding how to add a record template, see the knowledge article: How to link various records to a binder.
Initial Setup of the Loan Matrix
Once you have added the loan matrix workpaper against an account, click on it to open the slideout. The slideout will initially show the following:
Details of the account against which it was added
Instructions
Empty matrix with only the current client and binder
Click on "+ Add Client".
The following pop-up will appear, where you will need to select the relevant client and its binder to link to.
Once you have linked that binder, it will appear in the loan matrix.
In the loan matrix, click on the "+" to link the accounts between the two binders.
Using the Loan Matrix
Once the accounts have been linked, the balances as per each binder will be displayed in the loan matrix. If the balances agree, both cells will appear in green. If they do not agree, they will be displayed in red.
Note: When an account is linked in the matrix, whether it is the current binder or an external binder, the loan matrix will be added as a record against that account.
Example of a populated loan matrix with balance discrepancies:
If the loan balances between two entities agree, the account against which the loan matrix has been added to will display the 'Reconciled' status.
Tip: The matrix will display a black border around the cell which contains the balance of the account you are currently in. For example, in the following screenshot, the user has opened the loan matrix from account 600 "Loan to - The Emirates" which has a debit balance of $300,000. This balance is reflected in the matrix under the "In Arteta We Trust 2024 Accounts and Tax" binder (the current binder), in the black-bordered cell
Adding multiple loan accounts into a cell
You can add multiple loan accounts into a cell where there are multiple loans to be reconciled between two entities.
Where there are multiple loan accounts linked to one related entity, the loan matrix slideout will display a summary which breaks down the accounts that are linked. This summary will only be shown if the loan matrix record has been opened from any of those multiple accounts.
Manually Create Entities in the Loan Matrix
In our March 2025 update, we have released the ability for users to create entities manually in a loan matrix without needing to link to a binder. This is especially useful when these entities are not clients of the firm.
Click on the new '+ Enter Manually' button
Enter the entity's name
Then click on any of the columns to manually input the loan amounts.
