Understanding Liabilities

Liabilities represent your debts and financial obligations in Caprafi.

What is a Liability?

In Caprafi, a liability represents any debt, loan, or financial obligation you need to track. This includes mortgages, term loans, credit facilities, bonds payable, tax liabilities, leases, and other forms of debt.

Why Track Liabilities?

Liability tracking provides several key benefits:

• Net Worth Calculation - Assets minus liabilities equals your true net worth
• Debt Management - Monitor paydown progress and remaining balances
• Interest Tracking - Understand how much interest you're paying (shown as a cost in the portfolio)
• Payment Planning - Plan for upcoming payments and maturity dates
• Transaction History - Track every payment, disbursement, and fee

Liability Types Explained

Mortgage

Real estate loans secured by property. Track LTV ratio, lien position, and amortization schedules. Supports both fixed and adjustable rates.

Term Loan

Business loans, personal loans, and promissory notes with fixed repayment schedules. Supports variable interest rates with rate change tracking.

Credit Line

Revolving credit facilities and business credit lines. Interest charged only on drawn amounts. Track both credit limit and current utilization.

Bond Payable

Debt securities your organization has issued. Track coupon payments, ISIN, and maturity obligations.

Tax Liability

Outstanding tax obligations to tax authorities. Track tax type, tax year, and any disputes.

Lease Liability

Operating and finance lease obligations. Track monthly payments, lease terms, and purchase options.

Accounts Payable

Short-term trade payables to vendors and suppliers. Track invoice numbers, due dates, and payment terms.

Liability Lifecycle

Transaction Tracking

Every liability supports a transaction ledger for tracking all payment activity:

Payment Transactions

• Payment — Regular scheduled payments (principal + interest)
• Extra Payment — Additional payments beyond the schedule

Balance Changes

• Disbursement — Additional funds drawn (increases balance)
• Interest Charge — Interest added to the balance
• Fee — Fees charged to the account

Adjustments

• Refinance — Restructuring the terms
• Balance Adjustment — Manual corrections
• Forgiveness — Debt forgiven or cancelled

Cross-Asset Linking

When recording payments or disbursements, you can link them to a cash account. This automatically creates a corresponding withdrawal or deposit on your cash account, keeping your cash balance accurate.

Payment Summary Card

The liability detail page shows a Payment Summary card that breaks down:

• Total payments made
• Principal paid vs interest paid
• Average payment amount
• Remaining balance progress

Linking Liabilities to Entities

Each liability can be connected to one or more entities (banks, lenders, individuals):

• Lender - Who provided the loan
• Guarantor - Who guarantees repayment
• Vendor - Supplier for accounts payable
• Lessor - Property/equipment owner for leases

One entity is marked as Primary - this determines grouping in entity reports.

Interest Rate Tracking

For variable rate loans, Caprafi tracks interest rate changes over time:

• Set the initial rate when creating the liability
• Add rate changes as they occur
• Interest calculations automatically adjust

Amortization Features

For mortgages and term loans, providing complete payment details enables:

• Automatic payment schedule calculation
• Principal vs interest breakdown
• Remaining balance projections
• Payoff date estimation

Portfolio Impact

In the Portfolio Explorer, liabilities are shown with:

• Negative values - Displayed with a minus sign to indicate debt
• Interest cost as return - Accrued interest is shown as a negative return percentage, reflecting the cost of borrowing
• Entity grouping - Liabilities are grouped by their primary entity