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Intuit
26 helpful votes

Set up a loan in QuickBooks Online

Learn how to record a loan in QuickBooks Online.

Did you recently get a loan? In QuickBooks Online, you can set up a liability account to record the loan and its payments.

Step 1: Set up a liability account to record what you owe

First, set up a liability account to record the loan:

    1. Select Settings ⚙, then select Chart of Accounts.
    2. Select New to create a new account.

    1. From the Account Type ▼ drop-down menu, select Non-Current Liabilities. Note: If you plan to pay off the loan by the end of the current financial year, select Other Current Liability instead.
    2. From the Detail Type ▼ dropdown, select Loan Payable.

  1. Give the account a relevant name, like "Loan for a car."
  2. Choose when you want to start tracking your finances. In the Balance field, enter the amount in the account, and determine the as of date. Enter today's date if you want to start tracking immediately.
  3. Enter the full loan amount as a negative amount in the Amount field. Since the future payments to the bank are a liability for your business, the amount should be negative.
  4. Select Save and close..

Step 2: Record the money you got from the loan

Now that you have an account to track what you owe for the loan.

Here's how to track the loan money you have to spend. You can enter it all at once, or as in partial payments as you get them.

  1. Select + New.
  2. Select Journal entry.
  3. On the first line, select the liability account you just created from the Account dropdown. Enter the loan amount in the Credits column.
  4. On the second line, select the appropriate asset account from the Account dropdown. Enter the same loan amount in the Debits column.

This money is an asset to your business. Note: To pay and amortise the debt of an intangible asset, see the Amortisation schedule in QuickBooks Online.

Step 3: Record a loan payment

  1. Select + New.
  2. Cheque.
  3. Add a cheque number if you send an actual cheque. If you use direct withdrawal of EFT, enter Debit or EF in the Cheque # field.
  4. Enter the following information in the Category Details section.
    1. First line: Liability account for the loan and the amount of payment.
    2. Second Line: Expense account for the interest and the amount.
    3. Additional lines: Any additional fees along with the appropriate accounts.
  5. Select Save and close..

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