Good day, ed4biz. I can see the relevance of setting up and tracking loans and installments for your lending business within QuickBooks Online.
To keep track of all of your loans and payments, you must first register an account within the Chart of Accounts.
Here's how:
- Go to Settings ⚙, then select Chart of Accounts.
- Select New, then select Assets.
- From the Save account under and Tax form section dropdown, select Loans to Others.
- On the Account name field, enter a recognizable name like Loan - customer name.
- Select Save without entering an opening balance.
Once done, get ready to give a loan to your customer by entering a check and choosing the account you created to track loans.
Follow the steps:
- Go to + New, then select Check.
- Pick the account you used to fund the loan from the Bank Account dropdown,
- On the first line, from the Category dropdown, select the account you created to track loans.
- On the Amount field, enter the loan amount.
- Select Save and Close.
Third, while QuickBooks cannot track the interest automatically, utilizes the interest percentage to multiply the loan balances depending on the payment term.
Here's how:
- Go to + New, then select Bank deposit.
- From the Account dropdown, select the account you used to fund the loan.
- On the first line, from the Received dropdown, select the name of the customer with the loan.
- From the Account dropdown, select the account you created to track loans.
- From the Amount dropdown, enter the amount they paid.
- Important: If you charge customers with interest, on the second line, select the account you use to track interest income and enter the amount of the interest.
- Fill out the rest of the fields accordingly.
- Select Save and Close.
As for installment payment, you may need to use the recurring invoices moving forward: Create recurring transactions in QuickBooks Online.
There you have it, ed4biz. I'm always here if you need guidance on how to manage recurring transactions. Have a fantastic day.
