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Hi joseph8,
Thanks for reaching out here. QuickBooks Online provides the features you need to record and track your Shareholder loan seamlessly. I'd be happy to guide you through the process!
Your first step would be to set up a liability account for the loan. Here's how;
1. Go to Settings ⚙ and select Chart of Accounts
2. Click on +New from the left menu
3. In the Account dialog, select either Other Current Liabilities or Long Term Liabilities from the Account Type drop-down list
Note; Depending on the repayment time frame, the Account Type can be Other Current Liabilities (to be paid in full in one year) or Long Term Liabilities (to be repaid over more than one year)
4. From the Detail Type ▼ dropdown menu, select either Other Current Liabilities or Long Term Liabilities
5. Enter a Name for the account
6. Leave the Unpaid Balance field blank
7. Choose Save and close.
To record the loan, you'll create a journal entry by following these steps;
1. Open +New from the left menu and select Journal Entry
2. Enter the amount of the loan and log the proper amounts to the appropriate expense accounts
Note; The Liability/Loan account is increased, or credited, while the appropriate expense accounts are decreased, or debited. In journal entries, the total of the Debit and Credit columns must be equal.
3. Hit Save and close.
You're ready to record the loan payments as follows;
1. Select +New
2. Under Suppliers, select Cheque
3. From the Account ▼ dropdown list, select the liability account you created for this loan
4. Enter the Amount of the payment
5. Hit Save and close
The loan payment is successfully recorded!
Please don't hesitate to reach back out with additional questions. We'd love to help!
How does this help me when I want to run a payroll using the payroll module?
Thanks for reaching out to us again, @joseph8.
The steps shared by my colleague is a process to record loan outside of the payroll module. I can share some insights about the process you want to do in QuickBooks.
If you want to run payroll to deduct taxes, but doesn't want to submit the payroll, you can turn off Direct deposit for that employee.
If you do not disable Direct Deposit, the moment you send payroll, the funds will be offloaded to the employee's account on the check date. Since you're holding the money, follow the steps in this article to turn off DD processing for an employee: Turn off direct deposit for an employee. You can process payroll normally after this but it will not send the funds online. You're also still able to process Direct Deposit for other employees as this only applies to the name selected.
However, if you are not deducting any taxes for that paycheck, you can also skip the option to run payroll. Just record the loan right away.
While the payroll module doesn't track loans, it should be recorded manually. The steps shared by Trish_T will come in handy to track the shareholder loan.
Let me know if you need more help with this payroll and loan topic. I'll be more than happy to share some more insights with you. Have a nice day!
This is what I was looking for, thank you.
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