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ErinMW1
Level 1

How to record a Merchant Cash Advance in QB Desktop without having a very large interest expense?

What is the best way to record a Merchant Cash Advance

 

For example we received 650,000.  Our daily payments are $7,500.00.  We will actually be paying back 800,000.  I do not want to record that as an interest expense as it will skew our books?  

Please, any suggestions are appreciated

 

Erin

 

1 Comment 1
GlinetteC
Moderator

How to record a Merchant Cash Advance in QB Desktop without having a very large interest expense?

I've got a way you may consider doing, ErinMW1.

 

You'll want to set up a deposit or retainer process for your company. There are several steps in taking account of that money. You may need to set up a current liability account for upfront deposits, and retainers are liabilities, though you deposit the money into your bank account.

 

Here's how to create a liability account:

 

  1. Go to the Lists menu, select Chart of Accounts.
  2. In the Chart of Accounts window, right-click and select New from the pop-up menu.
  3. Select Other Current Liability as to the account Type.
  4. Enter a name for the account (for example, Upfront Deposit) in the Name field.
  5. Select OK.

Once done, you need to create an item and use it when recording upfront deposits or retainer. You can check out manage upfront deposits or retainers and go directly to Step 2 for the detailed steps.

 

I would also suggest consulting with your accountant about this to make sure the accuracy of your books.

 

If you have any additional concerns about managing your accounts, please comment below, and I'll be glad to assist you further.

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