Set up and track a line of credit

Learn how to set up and track a line of credit in QuickBooks Online.

With QuickBooks Online, you can set up and track your line of credit.

Set up the accounts for your line of credit

If you need to track a line of credit, you need to set up two accounts. One account is for the principal, and the other is an expense account for the interest.

Step 1: Set up an account for the principle

1. Go to Settings ⚙, then select Chart of Accounts.
2. Select New.
3. From the Account Type ▼ dropdown menu, select Current Liabilities.
4. From the Detail Type ▼ dropdown menu, select Line of Credit.
5. (Optional) Change the account name.
6. Select Save and Close.

Step 2: Set up an expense account for the interest

1. Go to Settings ⚙, then select Chart of Accounts.
2. Select New.
3. From the Account Type ▼ dropdown menu, select Expenses.
4. From the Detail Type ▼ dropdown menu, select Interest Paid.
5. (Optional) Change the account name.
6. Select Save and Close.

Track your line of credit

Transfer your credit funds into another account

If you want to put your credit funds into another account, you need to make a transfer.

Record interest charges

When you have used your credit, you’ll more than likely have interest charges. When you incur these charges, you will need to record them in your dedicated expense account for paid interest.

Make a payment to your line of credit

When you make a payment, you can track what you pay back to your bank or creditor.

Record paying for expenses with your credit

When you pay for things with your credit, make sure you record the bills and expenses.