How do I set up a employee loan repayment when using an outside payroll company?

Hello there, Kim.

To handle the repayment of your employee's loan, I recommend creating a journal entry. Let me provide more information and insights on how to do this effectively.

Follow the steps in creating a new journal entry:

1. Go to the Company menu.
2. Click Make General Journal Entries.
3.  Fill out the fields to create your journal entry. Please check the debit and credit are equals.
4. Click Save or Save & Close.

To ensure proper recording and accurate mapping to your general ledger, it would be best to consult with your accountant. They are familiar with the specific nature of your business and can provide tailored advice.

Additionally, regular reconciliation is important. This process involves reviewing your accounts in QuickBooks to ensure they are consistent with your actual bank and credit card statements.

If you have any concerns about the loan repayment, don't hesitate to reply on the thread. The Community is always here and willing to help.

Thank you Jayneus for the quick reply! When I import the weekly payroll from our payroll company it automatically creates a journal entry for the entire payroll and all the deductions etc. This week's import failed entirely because there was no place for the repayment to go in QuickBooks. If I create a journal entry wont it be a duplicate? I think I need someplace in the chart of accounts to accept the import for the repayment? No sure how to go from there...?

Creating a Journal Entry (JE) for the loan repayment will indeed result in duplication, Kim-S1. Therefore, there’s no need for you to make one in your situation, as QuickBooks will automatically generate the necessary entry when the import is successful.

Before you proceed with the import, it's essential to set up an account in the Chart of Accounts (COA). This will ensure that the imported data has a designated account to match, as the importing process requires that all data aligns with existing accounts in your COA.

Here’s how you can create an account:

1. Navigate to the Lists menu, then Chart of Accounts.
2. Click New from the Account dropdown.
   
3. Select an account type, then Continue.
4. Complete the account details.
5. Save & Close once done.

Additionally, I recommend collaborating with your accountant for guidance on best practices for loan repayments and overall payroll management in your specific accounting situation. They can provide valuable insights tailored to your business needs.

Furthermore, various payroll and employee reports can help you manage payroll and keep track of employee expenses in QBDT. You may want to check out this article as your reference to guide you in customizing them to get the data you need: Customize payroll and employee reports.

Your attention to detail and commitment to accurate record-keeping are truly commendable. If you have further questions about loan repayments in QBDT or anything else, please feel free to Reply below!

@Kim-S1 

You should have an asset account on your balance sheet for the amount of the loan to the employee.  That loan account is the account that should be credited on the payroll journal entry.