My company has 9 employee vehicles and a separate loan for each vehicle. Before I came here the loans were inputted as one liability under company truck financing in 2018. I want to put each one into the loan management tool but am unsure as to where to begin.
-Do I have to set up each truck loan with its own account under chart of accounts?
-Unsure how to find how much was paid to each individual truck loan as the old system before I came was to just post everything as one payment into the truck financing account.
Any help would be appreciated. Once I get started I should be in good shape but am confused on how to set the loans up.
Yes, you'll have to set up each truck's liability for detailed tracking under the chart of accounts. If the loan only has one company paid, you can create a parent liability account, here's how:
Go to Lists at the top menu, then select Chart of Accounts.
Select the Account drop-down at the bottom, then choose New to create a new account.
Select an account type, then Continue.
Enter the account details.
Select the Subaccount of checkbox if it's a child account.
From the drop-down, choose the parent account.
Select Save & Close.
Then, you can use the QuickBooks Desktop Loan Manager to help you track and record your loans. However, if it's managed by a third-party, you can set up an escrow account for the portion of the loan, here's how:
Navigate to the Lists menu and choose Chart of Accounts
Click the Account drop-down, then tap New.
Select Other Account Types, and then Other Current Assets.
Click Continue and enter the account name.
Hit Save and Close.
Once you've done, you can now track your loan in QuickBooks Loan Manager.
Go to the Banking menu and select Loan Manager.
Click Add a Loan.
Enter the account info for the loan (Account Name, Lender, Origination Date, Original Amount, and Term), then tap Next.
Insert the loan's payment info (Due Date of Next Payment, Payment Amount, and Next Payment Number) and tap Next.
Enter the interest info (Interest Rate, Compounding Period, Payment Amount, Interest Expense Account, and Fees/Charges Expense Account) and tap Next.
Also, to ensure that your books are accurate, I highly suggest consulting your accountant or accounting professional. They can guide you on what's the best way to handle this and provide more expert advice in dealing with this concern.
Please let me know if you have any questions about QuickBooks. I'll be glad to answer them for you. Take care always.
Regarding the liability account. When the loans were first entered whoever did them entered all 8 loans into one liability account called company truck financing and with 1 overall number. These loans are 2 years old and am not sure how to proceed with this from this point. I understand that when I first enter a new loan there is supposed to be an asset account (truck purchased) and the corresponding liability account (loan company). This is where I am stuck. Do I create a new liability account that corresponds to each individual truck loan? But then what? Journal balances out of the original liability account? I cant enter a new loan in the loan management because the original purchase price is lower than the amount that is in the company truck financing account. Im thinking its not even worth it to do this at this point since the loans are over 2 years old.