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masliaintanenterprise
Level 1

How do I withdraw cash without affecting EXPENSES? Reason is I want to pay back the loan I have provided BUT the loan amount is already used to purchase goods.

 
1 Comment
JessT
QuickBooks Team

How do I withdraw cash without affecting EXPENSES? Reason is I want to pay back the loan I have provided BUT the loan amount is already used to purchase goods.

Hi masliaintanenterprise,

 

Knowing how you record your transactions is a great way to keep your books tidy and accurate. I'll be sure to help you with your loan repayment.

 

You can record your withdrawal as a check or an expense transaction. Then, use the category you used when you recorded the loan you received to offset your outstanding liability.

 

For example, when I receive a loan, I can record it as a bank deposit and use a liability account to categorise it. This increases the money in my bank account and adds a balance to my liability account.

 

When I use the money to purchase goods, I can just record an expense against my bank account. Therefore, the affected accounts are the bank account and the expense account assigned to the items. The liability account is not affected in this process.

 

When I repay my loan, I can record a check or an expense against my bank account. Then, use the same liability account to categorise it. This decreases my bank balance and the balance of my liability account.

 

What I gave you is just the usual way to record loans. I know each business is unique, so I would recommend consulting an accountant to make sure your books are accurate. You can also check this article for your additional reference: Set up a loan in QuickBooks Online.

 

You can always tag me if you have questions when recording your loan repayment. That way, I can get back to you as soon as possible.

 

Have a good one!