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Level 1

Employee loan close out

I have QB desktop, I have a couple employees who had loans, but were deducted through our ADP payroll system. 

They are all paid off and need to close them out. They no longer owe any money. 

How do i go about closing them out?

 

 

2 Comments
QuickBooks Team

Employee loan close out

Hi there, @laurenmcginn.

 

You can create a deduction item for the employees' loan then make sure that the deduction account assigned is a liability account.

 

Let me show you how:

  1. In your QuickBooks Desktop, go to the Lists menu, then select Payroll Item List
  2. Click the Payroll Item button and then New.
  3. Select EZ Setup, then click Next.
  4. Choose Other Deductions, then Next.
  5. Then check the boxes that will apply then click Finish.
  6. Set up the payment schedule for the deduction and then hit Next.
  7. Click Finish.

 

To edit the payroll item, you can go to the Lists menu, then select the item under Payroll Item List.

 

To close out the loan, you can use journal entry. However, I recommend consulting your accountant for guidance with the posting accounts.

 

You may follow the steps on how to create a journal entry.

  1. Select + New.
  2. Select Journal entry. Or, if you're in Business view, switch to Accountant view first. Then come back to these steps.
  3. Fill out the fields to create your journal entry.
  4. Select Save and close.

 

I'll add this article as your reference on how to set up loan accounts and manually track them in QuickBooks Desktop: Manually track loans in QuickBooks Desktop.

 

Feel free to visit our QuickBooks Live Bookkeeping to get a dedicated expert to guarantee all your records in QuickBooks are accurate and up to date.

 

Feel free to tag me if you have additional questions. I'm here anytime you need help. Take care!

Level 1

Employee loan close out

They are not under payroll though.... They are just classified as employee loans. The loans were taken out of our separate payroll system, That is not attached to QB in any way... Please let me know how to close them out from here with that all being said?

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