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kbaldwin
Level 1

How to enter a loan from owner to company into QBO (AUS)

Hi,

 

One of the owners/directors loaned $X to the company. How do I enter this into QBO? We are in Australia


Thanks in Advance!

6 Comments 6
Kass_B - Product Champion
Content Creator

How to enter a loan from owner to company into QBO (AUS)

Hi kbaldwin,

 

The first step in recording a loan from a company officer or owner is to set up a liability account for the loan.

Depending on the repayment time frame, the Account Type can be Current Liabilities (to be paid in full in one year) or Non-current Liabilities (to be repaid over more than one year).

 

To set up the account:

  1. Select Settings ⚙️.
  2. Select Chart of Accounts.
  3. Select New.
  4. In the Account option, select either Current Liabilities or Non-current Liabilities from the Account Type drop-down list, depending on the type of loan and its repayment time frame.
  5. In the Detail Type drop-down list, select either Loan Payable, Current Liabilities or Notes Payable (depending on the repayment time frame)
  6. Enter a Name for the account.For example, Loan from Officer/Owner.
  7. Leave the Unpaid Balance field blank.
  8. Select Save and close.

The liability account is created. The next step is to create a journal entry for the loan. You must create a journal entry to record the loan, not only to record what the company owes but also to record expenses for year-end reporting as well as tax purposes.

 

To create the journal entry:

  1. Select + New.
  2. Under Other, select Journal Entry.
  3. Enter the amount of the loan and log the proper amount(s) to the appropriate expense account(s). In journal entries, the total of the Debit and Credit columns must be equal.
  4. Select Save and close.

 

If you have further questions, feel free to reply. I would also encourage you to speak to an accountant or bookkeeper for further help if required.

 

-Kass

kbaldwin
Level 1

How to enter a loan from owner to company into QBO (AUS)

Hi Kass,

 

Thanks for your help. Yes, I saw an article with similar instructions, however I am having trouble entering in balancing the credit and debit columns. Unfortunately, the company I usually use is not operating during this time due to COVID-19. 

 

If the amount were, for example, $100 of loan from owner/director to the company, what do I enter for the 'Accounts' and 'Credit/Debit' columns? It was just a once-off loan to company so it had a bit of petty cash to work with in the beginning. 

 

Thanks in advance,

Kass_B - Product Champion
Content Creator

How to enter a loan from owner to company into QBO (AUS)

Hi kbaldwin,

 

I'm sorry to hear that. We understand the impact COVID-19 is having on small businesses in Australia and are committed to continuing to support small business.


While I can't advise you as to what you should enter in the journal as far as what account(s) to use, I can advise that the Liability or Loan account balance would be increased/credited, while the appropriate account(s) would be decreased/debited. The totals in each column need to balance - so as an example, if you were only recording two lines, one would be the credit balance of $100 and one would be the debit balance of $100. I however can't say where you should record this amount from.  

 

In this circumstance, you may want to use this link to reach out to a QuickBooks certified ProAdvisor to assist you in decided what account(s) to use.

 

-Kass

wendo
Level 1

How to enter a loan from owner to company into QBO (AUS)

It appears that when you setup the liability account using Chart of Accounts step, it actually does the journal entry for you.

IrinaO
Level 1

How to enter a loan from owner to company into QBO (AUS)

Hello,

 

Is there a way to record transaction avoiding journal entry? How to record payment back to the owner? Thank you!

 

Irina

ReymondO
QuickBooks Team

How to enter a loan from owner to company into QBO (AUS)

Hey there, @IrinaO.

 

Yes, there is a way on how you can record this transaction in QuickBooks Online (QBO). 

 

You can simply create an expense transaction to record the payment back to the owner. Let me show you how:

 

  1. Click the +New icon and select Expense.
  2. Choose the payee in the Payee drop-down list.
  3. Select the expense account in the CATEGORY drop-down menu and enter the rest of the information.
  4. Once done, click Save and close.

You can also reach out to your accountant for further advice on how you can record this transaction in QBO. This will help you make sure that your books are accurate once you close them. 

In addition, you can run the Transaction List by Vendor report in QBO. This will show you the list of expense transactions you've made with your vendors. Just go to Reports and open the Transaction List by Vendor report.

 

Just click the Reply button if you need anything else. This way, we can get back to you. Have a great day.