How do I keep track of interest paid on loans?

Hello there, @usercnypumps.

You'll first have to set up a liability account to record your loan and its payments. That should include the interest you've paid. Then, record your loan repayment by creating a check. From there, you'll have to select the expense account from the Category drop-down to record the interest accordingly. Let me guide you how.

1. Go to the + New button.
2. Select Check. 
3. Add a check number if you plan to send an actual check. If you use direct withdrawal or an ETF, enter Debit or ETF in the Check # field.
4. On the Category details section, select the liability account for the loan from the Category drop-down. Then, enter the payment amount.
5. On the second line, select the expense account for the interest and enter the amount.
6. On additional lines, add any additional fees (optional).
7. Select Save and close.

For the detailed steps, you can also refer to this article: Set up a loan in QuickBooks Online.

Additionally, you can also pull up the Transaction Detail by Account report. This way, you're able to monitor your expenses and manage them accordingly. Just go to the For my accountant section from the Reports menu's Standard tab.

I'm also adding this article to effectively manage your business transactions in QBO: Help Articles. It includes topics about banking, expenses and vendors, and reports to name a few.

You're always welcome to comment below if you have other concerns about managing your expenses and vendor transactions in QBO. I'm just around to help. Take care always.

I believe I've done all these steps. The total loan payment shows up in my expenses, but there is no separate amount showing the interest paid. Looking for a way to keep a running total of interest paid on loans.

Hi @usercnypumps,

Welcome to the Community. Allow me to chime in and provide additional information about tracking interest paid in loans.

When you create a check for the repayment, there are two accounts you need. Liability account for the payment and an expense account to track the interest amount.

You can run the report from the chart of accounts to keep track of the information. Please refer to these screenshots:

Additionally, I recommend visiting the following article to learn how to personalize reports in QuickBooks: Customize reports in QuickBooks Online.

Fill me in if you have additional questions about tracking loans in QBO. I'm always here to help. Take care always.

So my question now is: after creating the check, my entire loan amount appears on my expense account. Though the principal portion of the payment was put into the liability account I created for it. But when figuring deductions, the principal amount should not be included, just the interest.

Thank you for getting back to us and clarifying things, @usercnypumps.

Allow me to fill you in on everything about recording loan repayment in QuickBooks Online (QBO).

The principal amount of the loan or the entire loan amount will always show on your expense account once you record loan repayment. However, if you wish to only show the interest payment to an expense account, you can manually record the loan interest payments to a different account. Here's how:

First off, you'll want to set up another expense account for the interest.

1. Click the Gear icon, then select Chart of Accounts.
2. Hit New.
3. Select Expenses from the Account Type drop-down
4. Choose Interest Paid for Detail Type.
5. Enter the name of the account you want.
6. Click Save and Close.

Once done, you can now use the account when creating a check or expense transaction for the interest payment.

1. Click the + New button, then select Check or Expense.
2. Choose a Payee, a Payment date, and a Payment method.
3. From the Payment account drop-down menu, select the bank account.
4. Choose the Interest Expense account from the Category column.
5. Enter the amount of the interest charge.
6. Click Save and close.

After recording the interest payment, you can run the QuickReport of the expense account for interest paid and verify it from there.

You might want to check out this article for more details: Set up a loan in QuickBooks Online.

Should you need any assistance managing your loan payments, I'm available here to help any time!

where is this in the much better QB desktop app?

Hi @Fleming1. I'll show you how to track loans in QuickBooks Desktop.

To start tracking loans, we'll have to set up a liability and expense account for the loan and interest payments, respectively.

Here’s how to set up a liability account for your loan.

1. Go to the Lists menu, then select Chart of Accounts.
2. Right-click anywhere and select New.
3. Select Other Account Types, then select the right account type for your loan:
   • Other Current Liability: Use this for short-term loans payable over one year.
   • Long Term Liability: Use this for long-term loans payable over a longer period.
4. Select Continue.
5. Enter the name and number for the account.
6. Select Save & Close.

Then, follow these steps to create an expense account.

1. Go to the Lists menu, then select Chart of Accounts.
2. Right-click anywhere, then select New.
3. Select Expense, then Continue.
4. Enter the account name for the interest payments or fees and charges.
5. Select Save & Close.

After that, create a new vendor for the bank or company you need to pay for the loan.

1. Go to the Vendors menu, then select Vendor Center.
2. Select New Vendor.
3. Enter the name of the bank or the company you need to pay for the loan.
4. Enter other vendor details such as phone number and email address.
5. Select OK.

Once everything is set, you can now record the loan amount and the repayments. For the detailed steps, check out this article and proceed to step 4: Manually track loans in QuickBooks Desktop.

Please come back should you need more help in setting up a loan in QuickBooks Desktop. 

I have a question about creating an expense account for my loan with no interest.  My loan has an origination fee and a filing fee included in the loan.  Under detail type I'm not sure which one to choose.  Do you have a suggestion on a detail type?  Thank you. 

Thanks for reaching out to the Community, res@finisroadrvp.

To properly identify which detail type you should use for your loan account, I'd recommend working with an accounting professional. If you're in need of one, there's an awesome tool on our website called Find a ProAdvisor. All ProAdvisors listed there are QuickBooks-certified and able to provide helpful insights for driving your business's success.

Here's how it works:

1. Go to our Find a ProAdvisor page.
2. Use the City or ZIP search field to specify a location.
3. Select Find a ProAdvisor.
4. Browse through your results and find one that works best for the business. You can click on each ProAdvisor's profile to learn more information about them.
   

Once you've found an accountant, they can be contacted through their Send a message form:

1. Use the available text box to introduce yourself. Be sure to include details about which services you're looking for.
   
2. Enter your appropriate info in the Your name, Your email, and Your phone number (optional) fields.
   
3. Hit Send message.
   

You'll also be able to find many detailed resources about using QuickBooks in our help article archives.

I'll  be here to help if there's any questions. Have a wonderful day!

Could you tell if I can keep all of my interests paid for multiple loans on one "Interest Paid" account?
Or, should there be a separate "Interest paid " account for each loan?