We know a way how to manage your loan payments in QuickBooks Online (QBO). Let us guide you through the process, Thushara.
Transactions related to loan repayment typically don't use a "Supplier Name" field since loans are associated with liability accounts in QBO. The program handles it using payment workflows like Payee Name, journal entries, or categorised expense payments. To create a voucher for loan repayment to an associated company, we can set up a liability account in your Chart of Accounts. Here's the process:
- Go to Settings and select Chart of accounts.
- Click New to create a new account.
- From the Account Type dropdown, choose Non-current Liabilities.
- If you plan to pay off the loan by the end of the current financial year, select Current liabilities.
- Choose the Notes Payable (or Loan Payable) from the Detail Type dropdown.
- Leave the Opening Balance at $ 0 and press Save.
When you're ready to pay back the loan, follow the steps below:
- Click the + New Plus icon.
- Select Cheque.
- Add a cheque number if you plan to send an actual cheque. If you use direct withdrawal or an EFT, enter Debit or EFT in the Cheque no. field.
- Select the liability account for the loan from the Category dropdown. Then enter the payment amount.
- Choose the expense account for the interest from the Category dropdown. Then enter the interest amount.
- On additional lines, add any additional fees. Select the appropriate accounts from the Category dropdown.
- When you're done, press Save and close.
For more guidelines, check out this article: Set up a loan in QuickBooks Online.
If you need to process debt amortization with a cheque, visit this article: Does QuickBooks Online have an amortization schedule?.
We've got your back if you have more questions about managing loans or QuickBooks-related concerns.
