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Level 1

I have a short term loan from a company for which we provide services. They want me to decrease amount in the invoices to cover the loan amount. How to do this?

Company A gives loan to company B. Company B provide services to company A and issues invoices for the services. So now company A owes money to company B. They (company A) do not want to get the loan back but they want to pay less (for the amount of loan) for the invoices. How to give back the loan through invoices? I created Other current Liabilities in the Chart of accounts. I could probably make a discount in the invoices for the amount of loan. But how to show that I am giving the loan back through this discount. Or what is the right way?
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QuickBooks Team

I have a short term loan from a company for which we provide services. They want me to decrease amount in the invoices to cover the loan amount. How to do this?

We have two options to do this, @userlily.

 

First, we can create a service item loan repayment. Then, change the income account to a liability account.

Here's how: 

  1. Go to the Sales menu and then choose Products and services.
  2. Select New and choose Service.
  3. Add a name and if you track SKUs, enter an SKU for the product.
  4. From the Category ▼ dropdown, select the category that best describes your product or service.
  5. In the Sales information section, enter a description. 
  6. Enter an amount in the Sales price/rate field.
  7. Select the Liability Account ▼ dropdown and the account.
  8. Once done, click Save and Close.

The next step is to create a credit memo to pay the invoice. 

 

The second option is to create a Journal entry to reduce the liability and A/R account. Then, apply it to your open invoices. I'll show you how:

  1. Got to the + New button and then select Receive Payment.
  2. Under Receive Payment, choose the customer.
  3. Make no entry on the form.
  4. Under Outstanding Transactions, select the invoice.
  5. Under Credits, select the journal entry to be applied as a credit.
  6. Once done, click Save and close.

I've also added this article that can guide you on how to personalize sales forms in QBO: Customize invoices, estimates, and sales receipts.

 

Please let me know if you have clarifications with the process. I’ll be here to help. Wishing you the best!

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Level 1

I have a short term loan from a company for which we provide services. They want me to decrease amount in the invoices to cover the loan amount. How to do this?

@Rubielyn_J Thank you for your help!

I choose the 2nd option.

When I follow your instructions on the second option something wrong is happening: when I do step 5.'Under Credits, select the journal entry to be applied as a credit.'    I see that credit amount doubles instead of going to '0'. 

 

I assume I made a mistake when I was creating  journal entry. When I create Journal entry in the first line I should choose the Loan account and put the loan amount in the Debits and on the second line do I choose my bank account or A/R and put the loan amounts in the credits? Is it correct?

 

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