Businesses of all shapes and sizes need capital to perform their regular operations. Regardless of the industry in which your business operates, chances are you’ll need capital at some point in time. And if you don’t have the necessary funds on hand, you may have to borrow the capital from a bank, angel investor, or some other lender.
Borrowing money is perfectly fine from a business owner’s perspective. But if you use the Quickbooks accounting software, you should record this loan to keep your books accurate and up to date. It’s a relatively quick and easy process that should only take a few minutes of your time. So for step-by-step instructions on how to set up a loan in Quickbooks, keep reading.
Before we begin, it’s important to note that loans should be recorded as liability accounts in Quickbooks. When you are ready to record a loan, log into your Quickbooks account and select the Lists tab at the top of the menu followed by Chart of Accounts. Next, select Account > New > Company > Lists > Chart of Accounts. From here, you can right-click anywhere on the list screen and choose New > Other > and click the down arrow to see a list of available account types.
After expanding the list of available account types, choose Other Current Liability for short-term loans or Long-term liability for, well, long-term loans. Once you’ve selected the appropriate liability type, you’ll be prompted to enter a name and reference number for the accounts in the respective fields. You will also see an option to change the account balance. Assuming you are using this account as a loan (and you are), the balance should be kept $0.00. Click Save and Close to save your changes and close the window.
Now that you have the loan account set up, you’ll need to actually deposit the loan amount. This is done by accessing Banking (from the main menu) > Make Deposits > choose the deposit amount for the loan > enter the name of the loan account you recently created in the From Account field > enter the loan amount in the Amount column > and click Save. Congratulations, you’ve just created a loan account and entered the deposit into your Quickbooks! For more Quickbooks tips and tricks, check back with our blog here at MyVao.
Did this tutorial work for you? Let us know in the comments section below!