Manually track loans in QuickBooks Desktop

Learn how to set up accounts for your loans, and manually track them in QuickBooks Desktop.

Cash and non-cash asset loans such as vehicles and office equipment are liabilities for your company. QuickBooks lets you track the loan amount and record your payments so you can keep your payments updated and never miss one. Here’s how.

Note: If you want to keep track of your loans and get reminders about upcoming payments with the QuickBooks Loan Manager.

Start tracking your loans in QuickBooks Desktop.

Step 1: Set up a liability account

Set up a liability account for your loan. You’ll need this when you record your loan amount and payments.

1. Go to the Lists menu and select Chart of Accounts or press Ctrl + A on your keyboard.
2. Select the Account ▼ dropdown, then select New or press Ctrl + N on your keyboard.
3. Select Other Account Types, then select the account type for your loan:
   • Select Other Current Liability for loans that are payable within a year.
   • Select Long Term Liability for loans that are payable over more than a year.
4. Select Continue.
5. Fill out the Account No. and Account Name fields.
   Notes:
   • You can select the Subaccount of checkbox if you want to link the account to an existing one.
   • You can fill out the fields in the OPTIONAL section if you want to add more info for easier tracking.
6. Select Save & Close.

Step 2: Set up a supplier

Create a supplier for the bank or lending company you need to pay for the loan.

1. Go to the Suppliers menu and select Supplier Centre.
2. Select the New Supplier ▼ dropdown, then select New Supplier.
3. In the SUPPLIER NAME field, enter the name of the bank or lending company you need to pay for the loan.
   Notes:
   • You can enter an opening balance for easier tracking.
   • You can enter other supplier details when you select Address Info, Payment Settings, and other tabs on the left menu.
4. Select OK.

Step 3: Set up an expense account

Create an expense account so you can track interest payments or fees and charges associated with the loan.

1. Go to the Lists menu and select Chart of Accounts or press Ctrl + A on your keyboard.
2. Select the Account ▼ dropdown, then select New or press Ctrl + N on your keyboard.
3. Select Expense, then select Continue.
4. Fill out the Account Name field.
   Notes:
   • You can select the Subaccount of checkbox if you want to link the account to an existing one.
   • You can fill out the fields in the OPTIONAL section if you want to add more info for easier tracking.
5. Select Save & Close.

Step 4: Record the loan amount

Record the loan amount and link it to the liability account you created in Step 1.

Cash loans

1. Go to the Banking menu and select Make Deposits.
2. If the Payments to Deposit window opens, select Cancel to close it.
3. Select the Deposit To ▼ dropdown, then select the account you want to deposit the loan into.
4. Select the date when you received the cash loan. You can also enter an optional note in the Memo field.
5. In the FROM ACCOUNT column, enter the name of the liability account you created in Step 1.
   Note: You can also use the ▼ dropdown and select it from there.
6. In the AMOUNT column, enter the loan amount. You can also fill out the other fields for easier tracking.
7. Select Save & Close.

Non-cash loans

You’ll need to create an asset account and a journal entry for non-cash loans.

1. Create an asset account
   1. Go to the Lists menu and select Chart of Accounts or press Ctrl + A on your keyboard.
   2. Select the Account ▼ dropdown, then select New or press Ctrl + N on your keyboard.
   3. Select the asset account type for your non-cash loan:
      • Select Fixed Asset (major purchases) for items that have useful value for more than a year such as buildings, land, machinery and equipment, or vehicles.
      • Select Other Account Types, then select Other CurrentAsset for items that you can convert to cash or use within a year.
      • Select Other Account Types, then select Other Asset for items that are neither fixed assets nor other current assets.
   4. Select Continue.
   5. Fill out the Account No. and Account Name fields.
      Notes:
      • You can select the Subaccount of checkbox if you want to link the account to an existing one.
      • You can fill out the fields in the OPTIONAL section if you want to add more info for easier tracking.
   6. Select Save & Close.
2. Create a journal entry.
   1. Go to the Company menu, then select Make General Journal Entries….
   2. Fill out the DATE and ENTRY NO. fields.
   3. Select the first line. In the ACCOUNT column, enter the asset account name you created earlier.
   4. In the DEBIT column, enter the loan amount.
   5. Select the second line. In the ACCOUNT column, enter the liability account name you created in Step 1.
   6. If the CREDIT column is not filled automatically, enter the loan amount.
   7. Select Save & Close.

Step 5: Record loan payments

Follow these steps to record your loan payments.

1. Go to the Banking menu and select Write Cheques or press Ctrl + W on your keyboard.
2. From the BANK ACCOUNT ▼ dropdown, select the bank account you want to use to pay the loan.
3. Verify the details in the No. and Date fields. You can edit them as needed.
4. In the PAY TO THE ORDER OF ▼ dropdown, select the supplier you created in Step 2.
5. In the $ field, enter the payment for the principal amount.
   Note: This automatically fills out the AMOUNT field in the Expenses tab.
6. In the Expenses tab, select the first line, then select the ACCOUNT field.
7. Enter the name of the liability account you created in Step 1.
   Note: You can also use the ▼ dropdown and select it from there.
8. Select the second line. In the ACCOUNT field, enter the name of the expense account you created in Step 3.
9. Enter the payment amount for the loan interest.
   Note: If you want QuickBooks to record payments at regular intervals for this loan, follow these steps:
   1. Select Memorize.
   2. In the Memorize Transaction window, set your preferences.
   3. Select OK.
10. Select Save & Close.