COVID-19 has brought many changes upon us and I know how important it is to be able to implement and properly account for responses to those changes. At QuickBooks, we're keeping a close eye on the evolving situation and doing what we can to help you navigate this in the program.
At this time, we don't have an article that outlines or a method to follow for entering CEBA into QuickBooks. I appreciate the link you've given and in reading that little bit about it, it could be that you can make use of QuickBooks Loan Manager, but I highly recommend speaking with an accountant to make sure this is correct.
An accountant will be able to work with you and the CEBA information to determine exactly what you need to put this in your books. If you're not already working with an accountant, you can find one that knows the ins and outs of QuickBooks by visiting our Find an Accountant page. All it takes is entering your postal code or city name to begin your search, then you can filter the results as you'd like.
Wishing you the best!
I am no expert but I wanted to get this on my books today and this is how I did it.
FIRST I created a new long term liability account like this below in my Chart of accounts
CEBA (Canada Emergency Business account)
|Long-term Liabilities||Notes Payable||Zero-rated|
don't fill in the opening balance when you create the account though because that creates a jnl entry and will confuse you! You do not want QB creating an offsetting jnl entry!
Next go to Bank deposits . Select the bank account the CEBA was deposited to and the date
next in the Received from: select your bank's name as the supplier (since it is you bank initiating this on behalf of the federal gov't)
under account use the above created long-term liabilities account, quick description, enter the amount of the CEBA (40,000)
this will enter the deposit to you bank account which will match to your bank transaction feed and subsequently change your newly created long-term liability account to the 40,000 and will now show as below in the chart of accounts.
This can later be changed to a term loan with your bank once that time comes in a year.
CEBA (Canada Emergency Business account)
|Long-term Liabilities||Notes Payable||Zero-rated||40,000.00|
I understand your logic however the CEBA is a line of credit. It did NOT get deposited into the bank account until I drew down for my payroll and other eligible expense. I will continue the draw down until the end Dec 2020. Wouldn't putting it in your bank account now as a deposit cause reconciliation problems because it is not there? I want to record where the money was used in case it is questioned at some point.
Another issue I foresee is that when the 25% of the loan is forgiven I think a forgiven loan is considered taxable as income. I used this as a Reference: https://www.advotaxlaw.ca/post/the-flaws-of-the-ceba-program-and-how-to-fix-them
If it's a line of credit, then like a credit card, it doesn't appear on your books until you withdraw from it; at which point it increases your liability (CEBA) and the cash pulled out goes wherever you put it (bank account etc prior to being used to pay a bill or payroll).
Thanks for joining this thread. I appreciate how having the kind of article like you've shared from Wave would be beneficial for handling the CEBA loan in QuickBooks Desktop or other versions of the software.
As I mentioned in my original response on this post, QuickBooks Desktop doesn't have an article or recommended method for recording this kind of transaction. Since that's still the case, I recommend speaking with an accountant if you're unsure how to go about it in QuickBooks. Please feel free to use our Find an Accountant page if you don't have an accountant that you're currently working with.
I also encourage you to submit feedback about this to our team. You can even share the link you've found to demonstrate how other software have come up with a solution. To do this, go to the Help menu in QuickBooks Desktop and choose Send Feedback Online. This goes to the appropriate team for consideration.
Don't hesitate to share your thoughts through the feedback tool. Take care.
Hi Laura - thanks for your replies. Im understanding you to be an employee of QuickBooks. If that is not the case, my mistake.
I have considered your idea that I submit feedback about this to your team at QB. But how about this instead - YOU DO IT - and point them to this thread?
What - on earth - am I paying QB $93.79/month for if you cannot offer this basic support that 1000s of Canadians must be working thru w CEBA this year?
And please dont hide behind "we dont offer tax advice." I can get the ceba into QB - DR cash-1001, CR Lt debt-3140.
What is the offset tax line entry to the 10K/20K income reported on s125 via line 8142?
If I had been using WAVE I would know without having this challenge....
Hi there aversely,
I thank you for your feedback. The comments made in the section mentioned by Laura are taken into consideration by the team that creates articles. I will pass your feedback along on my end as well.
If you have any other questions, feel free to reach out here.