How to Record a Loan Payable in Quickbooks
Still trying to figure out how to record a loan payable in Quickbooks? If you are reading this, I’m going to assume the answer is yes. Quickbooks is a loaded with features to streamline your accounting, including the ability to record loan payables. To learn more about this feature, keep reading.
The first step in the process of recording a loan payable is to create a liability account. Here’s where things get tricky, though: if you plan on repaying the loan within the current fiscal year, you’ll need to create the liability account from “Other Current Liability (or Current Liabilities.” If you do you not plan on repaying the loan within the current fiscal period, you’ll need to choose “Long Term Liability (or non-current liabilities.”
Assuming you plan on repaying the loan within the current fiscal period, you can record it by logging into your account and clicking the Gear Icon > Chart of Accounts > New > Other Current Liabilities (or Current Liabilities) > Loan Payable > and then enter a name for the loan. Names are completely optional, but using one will help you remember what the loan is for. When you are finished, click Finish to complete the setup.
Now that your loan has been created, it’s time to enter a balance for it. From the default Quickbooks home screen, click the + icon > Bank Deposit > Deposit To > and enter the date of the deposit. Next, enter the Loan Payable amount that you just created under the “Accounts” column and click Save.
Of course, you’ll probably be making payments towards your loan on a regular basis, in which case you’ll need to record them in Quickbooks. This is done by clicking the + icon > Check/Cheque > now enter the check for the appropriate amount and complete the other required fields. Quickbooks also has a helpful option that allows users to set up recurring payments for loans. This is done by ticking the box “Make Recurring,” at which point the payment will be send on the specified date each month.
Did this tutorial work for you? Let us know in the comments section below!