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Ctodd41
New Member
posted
Monday
last updated ‎July 01, 2024 6:47 AM

Using Customer Invoices as Payments Towards Their Loan

Hello,

 

I have a customer who is going to pay $100,000 upfront to give us some working capital as we are a new business. The plan is instead of charging them for invoices, we will use their invoice amounts as loan payments until the loan is paid off. Once we hit that point, we will begin charging them again. 

 

When it comes to the books, how do I record the $100,000 and then deduct from that loan every time we invoice them? When it comes to those invoices, we will also want to mark them as paid so it is considered revenue that we need to pay sales tax on. How do I go about marking them as paid from that $100,000 loan? 

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1 Comment 1
GenmarieM
QuickBooks Team
QuickBooks Team
Monday

Using Customer Invoices as Payments Towards Their Loan

Having timely access to funds is essential for financial stability and business operations, Ctodd41. At QuickBooks, we strive to ensure that our customers have a smooth and seamless experience. 

 

First off, let's create a liability account to record the loan from your customer. Here's how:

 

  1. Go to the Gear icon, then click Chart of accounts.
    1.PNG
  2. Click New and enter the Account name.
  3. Under the Account type, select Other Current Liabilities then choose Loan Payable for Detail type.
  4. Once done, click Save.

2.PNG

Now, let's record the loan from your customer by making a bank deposit.

 

  1. Go to +New, then click Bank deposit.
    3.PNG
  2. Choose an Account and under the Add funds to this deposit, choose the liability account you created.
  3. Enter the amount and Save.

4.PNG5.PNG

Finally, in deducting the invoice payments from the loan from your customer, I recommend referring to your accountant for the accuracy of your financial records. If you don't have an accountant, we can help you find one. Feel free to visit this page to find an accountant for your business: Find a QuickBooks ProAdvisor.

 

Shoot me a reply if need further assistance about your financial workflow in QuickBooks. I'll circle back to help at any time.

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