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Intuit

Set up and track a line of credit

Learn how to set up and track a line of credit in QuickBooks Online.

With QuickBooks Online, you can set up and track your line of credit.

Set up the accounts for your line of credit

If you need to track a line of credit, you need to set up two accounts. One account is for the principal, and the other is an expense account for the interest.

Step 1: Set up an account for the principle

  1. Go to Settings ⚙ and select Chart of Accounts.
  2. Select New.
  3. Select Current liabilities from the drop-down lists in the Account Type and select Line of Credit from the Detail Type field.
  4. Name the account something like "Line of credit," and fill out any other info you want to add, but leave the Unpaid balance field blank for now.
  5. Select Save and Close.

Step 2: Set up an expense account for the interest

  1. Go to Settings ⚙ and select Chart of Accounts.
  2. Select New.
  3. Select Current liabilities from the drop-down list in the Account type.
  4. Select Expenses from the drop-down lists in the Account Type and Interest Paid from the drop-down lists in the Detail Type field.
  5. Name the account something like "Interest paid for line of credit," and fill out any other info you want to add.
  6. Select Save and Close.

Track your line of credit

Transfer your credit funds into another account

If you want to put your credit funds into another account, you need to make a transfer.

Record interest charges

When you have a use your credit, you’ll more than likely have interest charges. When you incur these charges, you will need to record them in your dedicated expense account for paid interest.

Make a payment to your line of credit

When you make a payment, you can track what you pay back to your bank or creditor.

Record paying for expenses with your credit

When you pay for things with your credit, make sure you record the bills and expenses.

 

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