deduction from a check that applies to a repayment

We appreciate you reaching out here with your concern, ginatorres. I've come to share insights to help you handle employee loans in your account.

As I've tried it on my end, recording the transaction using an Other Current Liability account decreases the balance of the loan account. Thus, to help us rectify the incorrect balances, we recommend reviewing the account used when setting up an employee loan account.

Additionally, you can consider taking into account the insights shared by Pete_Mc on how to set up a loan account for an employee. This way, tracking employee loans will be entered accurately and ensure your accounts are balanced.

Moreover, I've added this guide to help you automate the matching process of your transactions and streamline the categorization of your entries: Create rules to categorize transactions in QuickBooks Desktop.

We'll keep this thread available so you can always reply below if you have additional queries when managing loans. Just keep us posted, and we'll get back you up. Keep safe.

@ginatorres 

Are you trying to apply this to reduce the loan balance that the employee owes the company?  If so, the employee's loan should be listed as an asset, not a liability.  If you deduct $100 from an employee's paycheck, you now owe that money TO someone (to yourself or someone else).  That is why it is increasing the liability account.  Therefore, you cannot apply a payroll deduction to a loan that you owe (a loan payable liability), it needs to be applied to a loan you are owed (a loan receivable asset).  Let me know if you need more help with this.  

That does make sense to me, but when i go back to reconcile I'm not able to track anything.    More detail:

     The loan is a business account/credit line

     The employee is actually the owner

Money was borrowed from the credit line directly into a business checking account.  Used for a business expense.  The employee/owner is utilizing his own money to pay back the loan, a bit from each paycheck.  

In physically recording this, I would make an actual transfer from business checking to the credit line as a payment.  That portion is not registering within Quickbooks if I'm tagging that deduction to the Asset repayment.  When we reconcile we're always "off"