How to Set up a Loan in QuickBooks?

QuickBooks is a widely known and popularly used bookkeeping and accounting software for small business owners and accounting professionals. Part of the reason for the immense popularity of QuickBooks Software is its amazing features. The QuickBooks accounting software has maintained its brand name in the market by regularly announcing really nice features in every update. 

There are other accounting software available in the market other than QuickBooks such as TurboTax and Xero. But QuickBooks provides the maximum advantages of the available features with a minimum cost. QuickBooks charges fees in order to take up the subscription for using the software. The user can decide which subscription is most suitable for him/ her. 

Intuit is the owner and developer of the QuickBooks software. It was initially released in the year 1983 in California, USA. QuickBooks offers unlimited customer support to its users. There are various other amazing features of the QuickBooks software. This article will provide information about Setting Up Loan in QuickBooks. 

Also Read: How to Undo Reconciliation in QuickBooks Online

Role of Loan in QuickBooks

A loan is very essential in business matters. As the firm needs funds for the future investments. A loan is termed as a liability so you need to record the necessary transaction related to that. You are required to set up a separate liability account in order to maintain the records.

You need to make two different liability accounts in the book of records. One for Long term liabilities that will record the loans that are for a longer period of time. The second one is for Short term liabilities that records the transactions of loans payable within a year or less. 

Steps to Set Up a Loan in QuickBooks

Below mentioned are the steps that help you in setting up a loan:

First, you are required to create a liability account.

• Proceed to the Settings and click the ‘Charts of Accounts’ option.
• Choose ‘New’ to set up a new account.
• From the drop-down list, search for the Account type.
• Select the ‘Non-current Liabilities’ option.
• Then, choose ‘Detail Type’.
• Click ‘Loan Payable’.
• Give the account the appropriate name.
• Look for the ‘Balance Field’ and enter the amount.
• Choose the date for tracking.
• Now, enter the total loan amount in the box named ‘Amount’.
• Scroll down and click on the ‘Save and Close’ option.

Banking Transaction

• Move to the ‘Add New’ icon.
• Choose the ‘Cheque’ option.
• From your bank account, select the account from which you want to borrow funds.
• After selecting, choose the account that you will track the loan repayments.
• Check the details thoroughly.
• Click on the ‘Save and Close’ option.

Also Read: How to Enter billable Expanses in QuickBooks

Steps to Create a Loan Account in QuickBooks

The following are the steps to create a loan account in the QuickBooks software:

• Move to the upper side of the screen.
• You will get the ‘Gear’ icon, click on it.
• Choose the ‘Charts of Accounts’ option.
• Click on the ‘Next’ option.
• Select the ‘Current Assets’ tab.
• Look for the types of details. 
• Choose the ‘Loan to Others’ option.
• Select the ‘Next’ button.
• Mention a preferable name.
• Click on the ‘Save’ option.

Recording Cash Loans

• Proceed to the ‘Banking’ menu.
• Choose the ‘Make Deposits’ option.
• If the screen displays the ‘Payment to Deposits’ windows, click on the ‘Cancel’ option.
• From the ‘Deposits to Field’, you are required to choose the account for depositing the loan amount.
• In the column ‘From Account’, click the liability account that you created.
• Fill the Total loan amount in the Amount column.
• Click on the ‘Save and Close’ option.

Expense Account

• Proceed to the ‘Lists’ menu.
• Choose the ‘Charts of Accounts’ option.
• Click on the ‘Create New’ option.
• Choose the ‘Expense’ option.
• Click ‘Continue’.
• Type the account details such as the account’s holder name and account number.
• This account will record the transactions of interest payments, fees, extra charges.
• Click on the ‘Save and Close’ option.

Conclusion:

The above article has covered the information about the Setting Up Loan in QuickBooks. If a user still has some issues regarding the QuickBooks software or needs any technical guidance or expert help, contact the QuickBooks Error Support professionals by reaching out 24/ 7 available Chat.

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