Good day, JD 4207. I have all the steps you'll need to allocate the loan and repayments correctly, along with running statements for clients.
The first step to start recording a loan for a client is to determine its purpose. If the loan requires a written check and serves other purposes apart from closing open invoices, follow the steps below:
- Go to Settings and select Chart of accounts.
- Click New, then set the Account Type to Non-Current Assets with the detail type Other Non-Current Assets since the loan will be paid back over 12 months or after the current financial year.
- On the Detail Type dropdown, select Loans to Others.
- Add a recognisable name like "Customer Loan-Lastname".
- Save and Close without entering an opening balance.
Next, let's issue a check for the loan:
- Click + New, then pick Cheque.
- Pick the account used to fund the loan for the Bank Account.
- In the Category details section, specify the account used to track the loan as the offsetting account.
- Enter the amount, then Save and close.
When allocating the repayment of capital plus interest, create a Bank deposit where you input the principal amount on the first line and utilize the Interest Income account on the second line. For detailed instructions, refer to this article and proceed to Step 3 under Option 2: Record customer payments.
Additionally, you definitely can create a statement for your clients. Since you'd like to show their outstanding balance, consider sending a Balance Forward. Here's a reference for your guide: Create and send customer statements in QuickBooks Online.
Furthermore, save this link to learn how to document uncollectible money owed: Write off bad debt in QuickBooks Online.
Know that I'm committed to ensuring you record the loan accurately. Let me know if you have other inquiries. I'll be here to support you.
