Floor Plan Transactions for Used Car Dealership

I'm here to walk you through on how to record and pay the vehicle, bford90.

We'll have to set up or use an existing liability account to track the loaned vehicle. I'll also show you a way to put that loan money into your bank account.

Here's how to set up the liability account:

1. Go to the Accounting menu and select Chart of Accounts.
2. At the upper-right, click New. 
3. From the Account Type dropdown, select Long Term Liabilities. If you plan to pay off the loan by the end of the current fiscal year, select Other Current Liabilities instead.
4. In the Detail Type dropdown, select Notes Payable.
5. Give the account Name.
6. Choose when you want to start tracking the money from the dropdown. 
7. Enter the full loan amount as a negative amount since the future payments to the bank are a liability for your business.
8. Select Save and close.

If you plan to put your loan money directly into your bank account, create a journal entry. I'd also suggest reaching out to an accountant so they can give you the right accounts and steps on how to record the loan. 

To create a Journal entry, here's how:

1. Select + New. Click Journal entry.
2. On the first line, select the liability account you just created from the Account dropdown. Enter the loan amount in the Credits column.
3. In the second line, select your bank account from the Account dropdown. Enter the same loan amount in the Debits column.
4. Click Save and close.

After that, create a check to enter the loan payment. 

1. Select + New and click Check. 
2. Enter the vendor and check details.
3. Then, enter the following information in the Category Details section. In the first line, select the Lability account for the loan and the amount of payment. Second Line, click the Expense account for the interest and the amount. Additional lines: 
4. Select Save and close.

You can check out these articles that will help you manage your opening balances for accounts and financial reports that will keep you track of the loan and its payments. 

Feel free to post your questions here if you need more help. You take care always and have a great day!

I also have a used car dealership with a floor plan except they don't deposit cash into my account unless I purchase the vehicle outside of the auction. When I make payments either I pay a portion of the vehicle (curtailment) if it doesn't sell in the alotted time frame or when I sell it I pay it off. Would I set up the floor plan in this manner as well? 

Thanks for checking with us, livingstone.

We can follow the steps provided by my colleague Catherine_B to record the flow plan transactions. We can also create a journal entry, however, I'd also suggest reaching out to an accountant so they can guide you on the posting accounts you need to use. They'll also help you on how to record if you pay a portion of the vehicle (curtailment) or when you sell it. Here's how to create a journal entry:

1. Click the + New Plus icon. 
2. Select Journal entry.
3. On the first line, choose an account from the Account field. Depending on if you need to debit or credit the account, enter the amount in the correct column.
4. On the next line, select the other account you're moving money to or from. Depending on if you entered a debit or credit on the first line, enter the same amount in the opposite column.
5. Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other. This means the accounts are in balance.
6. Enter information in the memo section so you know why you made the journal entry.
7. Press Save and close.

Feel free to visit our Help Article page for more insights about managing your business in QuickBooks.

I'd like to know how you get on after trying the steps, as I want to ensure this is resolved for you. Just reply to this post and I'll get back to you. Take care always.

I'm in the same situation. Did you figure it out by chance?

Hello there, joselin9792.

I appreciate you for joining this thread. 

If you haven't already, you can set up a liability account for the purchased vehicle. You can follow these steps:

1. From the Accounting menu, select Chart of Accounts.
2. At the upper-right, click New. 
3. From the Account Type dropdown, select Long Term Liabilities. If you plan to pay off the loan by the end of the current fiscal year, select Other Current Liabilities instead.
4. In the Detail Type dropdown, select Notes Payable.
5. Give the account Name.
6. Choose when you want to start tracking the money from the dropdown. 
7. Enter the full loan amount as a negative amount since the future payments to the bank are a liability for your business.
8. Select Save and close.

Once done, you can create a journal entry, and then, create a check to record the loan payment. You may follow the steps provided by my peer @Catherine_B.

If there's something else I can help you with, don't hesitate to post them below. I'll be right here to help.

I am not a used car dealership.  I do sell major units though and created a big mess in my file that I need to clean up.  I understand setting up the account like above, my difference is I do not receive any money from my flooring bank. I place an order with the manufacturer, they process the order with the flooring bank, I receive the mowers.  When I receive the mowers in my dealership, I get an invoice.  How do I enter the bill into QB (the bill comes from the manufacturer but I pay the flooring bank? Can I show the individual units? 

Then when I sell a unit, I need to show the individual unit on the buyers invoice.  I collect their money deposit that in my personal bank and then pay the flooring bank what I owe them and the rest is my profit.  I have been trying to figure this out for a while now do I can fix my mess.   Can you please help me?  

Thanks for asking us here in the Community, @jghareeb777. In your case, you can create an item for mowers, then create a flooring bank.

After that, create a personal bank and then create a bill with a mower.

Once done, pay the bill with the flooring bank, and then create an invoice. Receive payment with personal bank, and then transfer money from personal to flooring bank.

I'd also recommend checking with your accountant if they have other means of recording the transactions.

Feel free to come by and post some more of your concerns if you have any. I'll be right up to help you again. Take care.

Thank you.  Unfortunately I do not have an accountant.  I am trying to figure this out all on my own (which is why I mad such a mess in the first place!).  I will try what you have written out.  Thanks again!

Personal Bank is created.  Do I create a flooring bank the same way or should I create as a loan (since it is a line of credit)?  I have an opening balance but am confused about the start date, I would assume that I would input my opening balance with the start date as the day I was approved. 
If I am creating a bill with a mower who is my vendor ( I can't use a bank, do i use the mower manufacturer)? The customer invoice would be like normal and I would receive payment in my undeposited funds, record that in my personal bank and then transfer the money to the flooring bank (or loan)? 

Hey ghareeb777,

Nice to see you in the Community! I will be delighted to assist you. I can only imagine how hard it is to figure this out on your own. Luckily, we offer a ProAdvisor service where you can connect with experts in your area. Simply add your area code and browse through the options. We also have QB Live Accounting services if you may be interested in either of those in the future. Both offer a free consultation!

For your other concern,  this article will be beneficial in setting up and tracking a line of credit in QuickBooks Online. The process starts out with setting up a liability account from the principal and then setting up an expense account.

Please let me know if you have any other questions. I will be more than happy to help you! I hope you have a good day! 

Thank you Sasha.  I will read the links that you suggested.  

Sasha, are there instructions like this for Desktop for the line of credit?  I use Enterprise Desktop.  Thank you.

Thanks for getting back to us here in the Community, @jghareeb777. I know that the process of recording the line of credit in QuickBooks can be a little tricky. That's why I'm here to share further details about this.

For the time being, there aren't specific instructions for QuickBooks Desktop (QBDT) in setting up and tracking a line of credit. Though the article is for QuickBooks Online (QBO), the idea of how you can do it is also applicable in QBDT.

You'll have to start by setting up two accounts (if you haven't already). One is for tracking the principle, and the other is an expense account for incurred interest. Then, you can refer to this article for the complete guide: Set up and track a line of credit in QuickBooks Online.

Then, I would encourage you to consult with an accountant to further guide you in keeping your financial data accurate.

Also, to learn more about managing your financial data and the growth of your business using QBDT, I'd recommend checking out one of our websites: QuickBooks Help Articles. It includes topics about account management, banking, and expenses and vendors, to name a few.

Please keep me posted in the comments if you have other concerns about recording a line of credit and questions about managing transactions in QBDT. I'm always ready to help. Take care, and I wish you continued success, @jghareeb777. 

I cant understand when I do the journal entry-is it after I categorized all my floorplans into liabilities. My boss' accountant is no help he be-littles me for not understadning this, I am not a stupid person. I just need help when to do it.