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Intuit
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Manually track loans

If you acquire cash or other non-cash asset like vehicles, office equipment, building, etc. through a loan, the amount of loan is a liability for your company. QuickBooks Desktop lets you track the loan amount and record payments so you stay on top of it.

This article outlines the steps for manually tracking loans in QuickBooks Desktop.

QuickBooks Desktop (Windows)

Instead of going through these steps, you can use the QuickBooks Loan Manager to track and pay your loan.

Step 1: Set up a Liability account

  1. From the Lists menu, click Chart of Accounts.
  2. In the Chart of Accounts, right-click anywhere and select New.
  3. In the Add New Account screen, click the Other Account Types radio button and from the drop-down and choose either:
    • Other Current Liability: for short-term loans payable over one year.
    • Long Term Liability: for long-term loans payable over a longer period.
  4. Click Continue.
  5. Enter a name and number for the account.
  6. Click Save & Close.

Step 2: Set up the vendor (Bank/Lending company)

  1. From the Vendors menu, click Vendor Center.
  2. In the Vendor Center, click New Vendor.
  3. In the New Vendor window, enter the name of the bank or the company you need to pay for the loan.
  4. (Optional) Enter other vendor details such as phone number and email address.
  5. Click OK.

Step 3: Record the loan amount

Cash loans

  1. From the Banking menu, select Make Deposits.
  2. If the Payments to Deposit window opens, click Cancel.
  3. In the Make Deposits window:

    User-added image

    1. In the Deposit To field, select account to deposit the loan into.
    2. Check the Date and enter an optional Memo.
    3. In the From Account column, select the Liability account you created in Step 1.
    4. In the Amount column, enter the loan amount.
    5. Click Save & Close.

Non-cash loans

  1. Create an Asset account.
    1. From the Lists menu, click Chart of Accounts.
    2. In the Chart of Accounts, right-click anywhere and select New.
    3. In the Add New Account screen, choose any of the following:
      • Fixed Asset: for items that have useful value for more than a year (vehicles, buildings, etc)
      • Other Current Asset: for items with value that can be converted to cash (prepaid expenses, etc..)
      • Other Asset: for items that are neither Fixed Assets nor Other Current Assets.
    4. Click Continue.
    5. Enter a name and number for the account.
    6. Click Save & Close.
  2. Enter a journal entry.

    User-added image

    1. From the Company menu, click Make General Journal Entries.
    2. Enter the Date and journal Entry No.
    3. Click the first line and debit the loan asset account.
    4. Click the second line and credit the liability account.
    5. Click Save & Close.

Step 4: Record loan payments

Reminders:

  • Payment for the principal amount will be recorded as a deduction to the Liability account. Once you have completed all payments, the value of the liability account will be zero.
  • Interest payment will be recorded as a company expense.

User-added image

  1. From the Banking menu, select Write Checks.
  2. Choose the Bank Account you will use to pay the loan.
  3. Verify Check NO. and Date.
  4. In the Pay to the Order of field, select the name of the bank.
  5. Go to the Expenses tab and in the Check details area:
    1. Click the first line then choose the liability account created in Step 1 and enter payment for the principal amount.
    2. Click the second line then choose an interest expense account and enter payment for the loan interest.
  6. (Optional) Memorize the check if you want QuickBooks to enter the payment automatically at regular intervals.
    1. Click Memorize.
    2. Choose and fill out all necessary fields.
    3. Click OK.
  7. Click Save & Close.

QuickBooks Mac Desktop

Step 1: Set up a Liability account

  1. From the Lists menu, click Chart of Accounts.
  2. In the Chart of Accounts, click the + icon to add a new account.
  3. In the Add New Account screen, Type field and choose either:
    • Other Current Liability: for short-term loans payable over one year.
    • Long Term Liability: for long-term loans payable over a longer period.
  4. Enter a name and number for the account.
  5. Leave the opening balance at zero.
  6. Click OK.

Step 2: Set up the vendor (Bank/Lending company)

  1. From the Vendors menu, click Vendor Center.
  2. In the Vendor Center, click the + icon and then choose New Vendor.
  3. In the New Vendor window, enter the name of the bank or the company you need to pay for the loan.
  4. (Optional) Enter other vendor details such as phone number and email address.
  5. Click OK.

Step 3: Record the loan amount

Cash loans

User-added image

  1. From the Banking menu, select Make Deposits.
  2. If the Payments to Deposit window opens, click Cancel.
  3. In the Make Deposits window:
    1. In the Deposit To field, select account to deposit the loan into.
    2. In the From Account column, select the Liability account you created in Step 1.
    3. In the Amount column, enter the loan amount.
    4. Click Save.

Non-cash loans

  1. Create an Asset account.
    1. From the Lists menu, click Chart of Accounts.
    2. In the Chart of Accounts, click the + icon to add a new account.
    3. In the Add New Account screen, choose any of the following:
      • Fixed Asset: for items that have useful value for more than a year (vehicles, buildings, etc)
      • Other Current Asset: for items with value that can be converted to cash (prepaid expenses, etc..)
      • Other Asset: for items that are neither Fixed Assets nor Other Current Assets.
    4. Click Continue.
    5. Enter a name and number for the account.
    6. Leave the opening balance at zero
    7. Click Save.
  2. Enter a journal entry.

    User-added image

    1. From the Company menu, click Make General Journal Entries.
    2. Enter the Date and journal Entry Number.
    3. Click the first line and debit the loan asset account.
    4. Click the second line and credit the liability account.
    5. Click Save.

Step 4: Record loan payments

Reminders:

  • Payment for the principal amount will be recorded as a deduction to the Liability account. Once you have completed all payments, the value of the liability account will be zero.
  • Interest payment will be recorded as a company expense.

User-added image

  1. From the Banking menu, select Write Checks.
  2. Choose the Bank Account you will use to pay the loan.
  3. Verify Check NO. and Date.
  4. In the Pay to the Order of field, select the name of the bank.
  5. Go to the Expenses tab and in the Check details area:
    1. Click the first line then choose the liability account created in Step 1 and enter payment for the principal amount.
    2. Click the second line then choose an interest expense account and enter payment for the loan interest.
  6. (Optional) Memorize the check if you want QuickBooks to enter the payment automatically at regular intervals.
    1. Click Memorize.
    2. Choose and fill out all necessary fields.
    3. Click OK.
  7. Click Save & Close.

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