How do I enter the PPP loan into my deposit?

@alikatt 

"How do I enter the PPP loan into my deposit?"

More guidance/clarification is needed on this issue. For now, the deposit goes to the PPP Loan Short term account in QBO.

I would create two new accounts:

1) PPP Loan Short Term - Bank Name (e.g. Chase)

2) PPP Loan Long Term - Bank Name (e.g. Chase)

See the screenshot below for reference.

#1 could turn into a grant loan (Forgiveness of loan)

#2 remaining balance would be a 2-year loan

Again, more guidance is needed in this area later.

create a liability account titled PPP  loan and use that as the source account for the deposit

later you will either have to pay it back as with any other loan, or it will be forgiven.  If it is forgiven, then you use a journal entry, debit the loan, credit income for the amount in the loan account

Did you enter the loan amount as your balance? I am trying to add it and is asking " What was your account's balance on 04/24/2020? Thanks!

Welcome to Community @cmobilerepair,

Yes, when you enter a loan deposit you can enter the loan amount as a balance in the Account balance box. Let me help you enter a loan account in your QuickBooks Online. Here's how:

1. Go to the Gear ⚙ icon, and select Chart of Accounts.
2. Click the New button.
3. Select the Account Type and also the Detail Type.
4. In the name box, enter the PPP loan as the name of the account.
5. Fill out the Description (Optional).
6. Click the drop-down arrow in the When do you want to start tracking your finances from this account in QuickBooks box, then select Other.
7. Choose the date. (e.g. 04/25/2020).
8. Enter the loan amount in the What was your account's balance box.
9. Click Save and Close.

For more details, check out set up a loan in QuickBooks Online.

In case if you need help reconciling your account, refer to this link: Reconcile an account in QuickBooks Online

If you need further assistance, feel free to leave a message in the comment section. I'm always here to help. Have a wonderful day!

So the cash is in my checking account register, do I transfer it to the new loan account?

Do I transfer the cash from checking to the loan account?

Hello, @Barrym64.

Since the money is from a loan, you can set up a liability account in QuickBooks Online to transfer your fund from your checking to liability account to record the loan and its payments.

To transfer funds, here’s how.

1. Select + New.

2. Under Other, select Transfer.

3. From the Transfer Funds From the drop-down list, select the bank account that the funds are coming out of.

4. From the Transfer Funds To drop-down list, select the bank account the funds are being deposited into.

5. In the Transfer Amount field, enter the amount being transferred.

6. Edit the Date.

7. (Optional) Enter a description of the transfer in the Memo field.

8. Select Save and close or Save and new.

You may refer to this article for additional information about transferring funds in QuickBooks Online. Transfer funds between accounts.

Also, you can check this article on how to transfer funds from credit card account to bank. Transfer funds from a bank to a credit card account.

Please let me know if you need anything else. Thanks!

I will most likely use the funds from our PPP loan for payroll. The PPP was deposited to our operating account and i usually record a intercompany transfer. but in this case i want to also track the balances used that i transfer from our operating to our payroll account and at the same time record the total payroll liablity to the PPP (currently liability. how would i do that or should i just leave the total balance of the loan alone? 

Hello, FrankieC. You've come to the right place. The Community is here to help.
 

Funds can be transferred between all balance sheet accounts, such as assets, liabilities, and owner's equity. Money transferred from an operating account to a payroll account can be easily recognized and tracked in your bank register where you'll be able to see all of the transfers you've made between different accounts.
 

To record payroll liabilities, you can use either an expense or liability account when creating the journal entry. If an expense account is used, there's no need to write checks. However, if you use a liability account, you'll need to write checks. You can use this resource for steps on how to record the payroll liability for the PPP loan you received: Record payroll transactions manually

Additionally, here's a helpful feature on our website where you can calculate the Paycheck Protection Program loan forgiveness: Intuit Aid Assist
 

I'll be here to help if you have any questions so please don't hesitate to reach out anytime. Have a wonderful day!

So once I log the Transfer, the Chart of Accounts for the PPP Loan is at Quickbook Balance $0.00?

Hello @NOSNO,

Yes, once the transfer is done. The originating account will be zero. As my colleague mentioned above, the money transferred to other accounts can still be tracked in the bank register. 

You can also run a General Ledger report to view the activity and balances in your accounts. It also shows all the transactions that occurred for each account in your Chart of Accounts.

Here’s how: 

1. Go to Reports.
2. Enter/select General Ledger in the search field.
3. Select Customize and filter to show the details.
4. Click Run report.

Let me share this link for additional information about General Ledger: https://quickbooks.intuit.com/r/encyclopedia/general-ledger/.

If you have any other questions, feel free to respond to anytime. Have a great day!

Here is my step-by-step set up for the PPP Loan (Long Term Liability account), the Contra account (Short Term Liability account), and the deposit to your Operating Account. Should you have a separate Payroll Account, once the first three items are setup, you would just make a QBs  transfer from the Operating Account to the Payroll Account.

I can't choose Long Term Liability account under the Sub account unless I create another Long term Liabilities account.

I can't choose the Long Term account under the sub account section unless I creat another new account.

Hello, mgalrito. 

I'm happy to help you out. If you're referring to whether you should set up your loan as a short term or long term liability, then this is entirely based a few points. If you plan on receiving loan forgiveness, you can set it up as a short term liability, as the life of it is only 8 weeks. If you're concerned that for any reason it won't be forgiven, you have the option of making it a long term liability as it can be repaid over a 2 year cycle in 2021 and 2022. 

Here's a helpful article highlighting the PPP loan forgiveness and what's required for it. 

If you need any other information, help or guidance, feel free to post below. 

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When I do the transfer from the liability to the checking; it is adding to the loan.  It should be subtracting so I know what amount of the loan is left.  How should i do the transfer so it does a running total?

Hi there, @garner constr.

If you transfer the amount from the liability account to the checking account, it will automatically add up the amount to both of these accounts. 

Since you want to decrease your liability account balance, we can transfer the funds from your checking account to the liability account. This will debit the amount to both of these transactions.

In case you need help in accomplishing other tasks in QBO, you can check our articles in this link. Let's make sure that the topic is set as "QuickBooks Online."

That's it! Please let me know if there's anything else I can do to be of assistance. Wishing you and your business continued success in all that you do. 

So, I created the Liability account and added the amount of the loan.  Now, when I reconcile my bank account, what do I do with that entry and how do I link it to the loan?

I appreciate you for joining the thread, @strivecreative.

If the loan amount wasn't deposited on your business bank account, then you should have created a new bank for it or deposit the loaned amount to which bank it must be deposited so reconciliation will not have any issues. This can be done by selecting the desired bank account from the Account drop-down on the Bank Deposit page.

Keep me posted if there's anything else you need assistance with. I'm a few clicks away to help. Have a good day!

Hi!  My PPP loan was deposited to my business bank account.  How do I reconcile my bank statement.  Thanks!

It's good to know that you already received your loan, Karen. I'll help you with the reconciliation.

If you haven't already, you can make a bank deposit to record your PPP loan. After that, you can proceed with the reconciliation. See the detailed steps or watch the video tutorial in this article: Reconcile an account in QuickBooks Online.

On the other hand, feel free to check our Business Discussions to see more conversations about PPP loans.

I'm just right here if you have questions about the reconciliation.

Thank you for your response, but I am wondering if the PPP check is deposited directly into my business checking account, how to I track/record the payments of forgiveness?  Am I supposed to also create a loan-other liability for the PPP amount and track my payments there?  Our payroll, utilities, all forgiveness expenses are paid out of our business checking account, not the loan.

Someone earlier had suggested that I create a bank account, as a sub account under our business checking.  Which is what I did.  As I pay eligible forgiveness expenses, I simply choose the sub account for payment.  This has been great to track the forgiveness and see how much is remaining in the PPP sub account.  However, I cannot reconcile my bank statement for May, now that I have created this sub account.  Perhaps there is a way to do this now that I am down this path.  Or I can go back and set this up the way it should be.  Thank you!

Hi there, karenhvah.

I'm happy to show the necessary steps to take to track your PPP loan so you can be prepared for loan forgiveness. Follow along below:

One of the main components of the Paycheck Protection Program is to help employers continue to pay or re-hire their employees. As you use your PPP funds, continue to run payroll and pay your employees.

Track what you spend on other eligible operating expenses:

You can track what you spend on other eligible operating expenses by recording expenses, checks, or bills as you normally would. Just make sure you're properly categorizing them.

1. Go to the + New icon and select Expense, Check, or Bill.
2. In the Payee field, enter the business or person you bought the expense from.
3. Fill out the Payment account fields.
4. Then the Payment date and Payment method fields..
5. (Optional) You can use the Ref no. field to enter an identifying number from the purchase receipt.
6. Give the item a name, and from the Category ▼ drop-down, select the right expense category.
7. Enter the full amount of the item in the Amount field.
8. Select Save and close.

Run a report to see how much you’ve spent:

1. Go to Reports and select Profit & Loss.
2. On the Reports period ▼ drop-down, select Custom. Enter your covered period:
   - First date: the day your lender sent you the funds.
   - Second date: 8 weeks after your lender sent you the funds.
3. Select the Customize button.
4. Select the Change columns link found under the Column drop-down.
5. After the Change column expand opens, select % of Column checkbox.
6. Select the Filter drop-down, select the Distribution Account checkbox.
7. Select all the categories that you’ve spent money on ( it’s okay if you select all the categories), and select Run report.
8. Select the Save customization button, give your report a name, and select Save.

Now that you're set up to track your PPP loan, check out this helpful article about Tracking how you use your Paycheck Protection Program loan. It lists the steps I've provided above, as well as some additional information. I also suggest checking out this article, it highlights what you need to do to prepare for loan forgiveness. 

If there's anything else I can help with in the meantime, feel free to post below. 

Thanks for your time and patience, have a lovely weekend.