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Intuit
308 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 Long Term Liabilities. Note: If you plan to pay off the loan by the end of the current fiscal year, select Other Current Liabilities instead.
    2. From the Detail Type ▼ dropdown, select Notes Payable.

  1. Give the account a relevant name, like "Loan for a car."
  2. Choose when you want to start tracking your finances from the ▼ dropdown. Or learn more about opening balances:
    • Select Today if the account you're tracking is brand new as of today. In the Account Balance field, enter the amount in the account as of today. Enter
    • If you started the account on another date, select Other. In the Select a date field, enter the date you want to start tracking transactions in QuickBooks. In the Account Balance field, enter the balance of the account for the date you choose.
  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.

    1. Select Journal entry. Or, if you're in Business view, switch to Accountant view first. Then come back to these steps.

  1. On the first line, select the liability account you just created from the Account dropdown. Enter the loan amount in the Credits column.
  2. 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 amortize the debt of an intangible asset, see the Amortization schedule in QuickBooks Online.

Step 3: Record a loan payment

  1. Select + New.
  2. Check. Or if you're in Business view, follow the steps to switch to Accountant view first. Then come back to these steps.
  3. Add a check number if you send an actual check. If you use direct withdrawal of EFT, enter Debit or EF in the Check # 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..

Your books done right - guaranteed.

Your expert bookkeeping team will review and close your books every month, and guarantee that they are accurate, up to date and ready for tax time. Learn more about QuickBooks Live Bookkeeping.

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