Some companies need to take out a loan from time to time to finance capital projects like new buildings, facilities, or product research & innovation. When your business takes out a loan, you can account for the loan as a liability and monitor each loan amount to reduce the liability. Keep reading this blog to know how to enter a loan in QuickBooks. Setting up a liability account for a short-term or long-term loan in QuickBooks business accounting software to track and record the loan deposit amount and all loan repayments.
Make a Liability Account
Sign in to your account using your QuickBooks online password to build a liability loan account. Then take the following steps:
- In the main menu, pick “Lists.”
- In the context menu, choose “Chart of Accounts.”
- Below the list of accounts, choose the “Account” button.
- From the pull-down menu, select “Fresh.”
- After that, click on the ‘Company Lists’ option and then ‘Chart of Accounts.
- Choose “New” from the context menu after right-clicking on any position on the list.
- To extend the list of available account forms, select “Other” from the accounts list and then click the down-arrow button.
You now have the choice of choosing the loan form. For short-term loans, select ‘Other Current Liabilities’ with a repayment period of one year or less, or ‘Long-term Liability’ for loans with a repayment period of more than one year. Select ‘Continue’ from the drop-down menu. In the relevant fields, assign the accounts a title and a reference number. Remove the balance from the equation and set it to zero. Select ‘Save and Close’ from the drop-down menu. Your loan has been entered into the system.
Also Read: How To Set Up a Loan in QuickBooks?
Make a deposit to enter a loan in QuickBooks
- To deposit the loan number, go to the main screen and pick “Banking,” then “Make Deposits” from the context menu.
- If the Transactions to Deposit window appears, close it by pressing the “Cancel” button.
- In the Make Deposits slot, choose the loan’s deposit account.
- After that, in the “From Account” tab, type the name of the liability account you created to track the loan.
- In the “Number” column, type the loan balance in the field. Select “Save” from the drop-down menu.
Keeping Track of QuickBooks Loan Payments
To assure that the company’s finances are up to date at the end of and fiscal year, it’s a good idea to enter a loan in QuickBooks for payments on a regular basis.
- To do so, go to the main menu and pick “Banking,” then “Write Checks” from the background menu.
- In the Write Checks pane, enter the payee name and repayment sum in the appropriate fields.
- In the Write Checks window’s information section, allocate the interest amount of the loan repayment to your chosen expense account.
- The remainder of the loan, also known as the principal, should be assigned to the liability account you generated to keep track of the loan.
- If you want QuickBooks to register this payment immediately at periodic intervals and issue a payment reminder.
- Click the “Edit” button and then select the “Memorize Check” option.
- To save the payment and close the window, press the “Save and Close” button.
Create an expense in QuickBooks Online for a mortgage payment
- To begin, make an account to keep track of your assets and mortgage payments.
- Pick Cost from the Build menu.
- After that, fill in the Payee area with the name of the company or person who gave you the loan.
- From the Payments drop-down menu, select the bank account that will be used to make the loan payment.
- Then, pick a payment method from the drop-down menu and enter the payment date.
- In the Ref no. area, insert any identifying numbers from the payment receipt.
- To keep track of the loan payment, do the following:
- Pick the account you used to manage the loan from the Section drop-down in the first line.
- Fill out the total amount in the Amount area.
Entering a loan in QuickBooks is an easy yet long process. You should follow each step carefully to avoid any conflicts in your account. However, if you got into any problem while entering a loan in QuickBooks, then you should contact QuickBooks customer service or can consult your nearby technician.
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