Record Loan Payment Receivable in QuickBooks

Relationships involving lending are frequently profitable for both sides. While the customer owns the loan receivable, the debt they owe can be recorded in the QuickBooks accounting program. Depending on the loan type, there are different ways to record a loan receivable. We’ll go over everything with you right here and show you how to enter that sum in your accounting program. In QuickBooks, there is a function that enables you to “record loan payment receivable in quickbooks” by setting up liability accounts. You will keep track of the amount and interest paid for each of your loans in the cash and non-cash liabilities account. In this article, we’ll go over the procedure to Record a Loan Payment and Receivable in QuickBooks Desktop or Online.

Table of Contents

Setup a Liability Account Before you Enter Payment for a Loan in QuickBooks

You must set up a liability account in QuickBooks accounting software if you want to use it to keep track of your loans and loan payments.

Create a Liability Account

Here’s how to create a liability account in QuickBooks desktop so that you can monitor loan payments:

Launch QuickBooks and then move to the Lists option
Next, choose the “Chart of Accounts” option
Select “New” from the menu
Choose the account type, select:
- If you have a short-term loan with a one-year repayment period, it will be listed under Other Current Liability Account
- If you have a long-term loan that is repayable over more than a year, it will appear on your long-term liability account
After that, select “Continue” button from the menu
Enter the liability account’s name and number here
At last, hit the “Save & Close” button.

Click here: How to Setup QuickBooks Loan

Create a Vendor Account

You must set up a vendor account by following the instructions below in order to pay the bank or business:

Choose Vendor Center from the Vendors menu
Select New Vendor from the menu
Put the vendor’s name here (bank or company name)
You can also enter a vendor’s contact information
In the end, click on the “Ok” button.

Create an Expense Account

You must set up an expense account by following the instructions below in order to keep track of loan-related interest payments:-

Go to the Chart of Accounts can be found under the Lists menu
Next, click on the “New” button
Choose Expense and then click Continue
Now, enter the account name
At last, select the “Save and Close” option.

You have now created each account needed for QuickBooks Desktop to record loan payments.

If you have any specific query, also get in touch with the experts of QuickBooks Live Chat 24x7.

In QuickBooks Desktop

How to Record Loan Payment Receivable in QuickBooks Desktop?

You can record loans in QuickBooks Desktop using one of two methods. Cash and non-cash asset loans can both be recorded, but the procedures for doing so vary.

Record a Cash Loan in QuickBooks

You can use the methods shown below to record loan payment receivable in quickbooks:

Select Banking from the menu
Simply select Make Deposits
If a new window titled Payments to Deposit appears, choose the “cancel” button
In the Make Deposit window, enter the following information:
Through the Deposit To field, choose the account where the loan will be deposited
Enter a memo followed by choosing the date option
Choose the liability account you created to keep track of loan payments under From Account
In the Amount column, enter the loan amount
In the end of the process, click on the “Save & Close” button.

Record a Non-Cash Asset Loan in QuickBooks

Follow the instructions below to record a non-cash asset loan in QuickBooks:

Create a New Asset Account

Select Chart of Accounts under Lists
Select New by performing a right-click on a blank section
Choose Your Account Type:
Select Fixed Asset if the assets taken as loans have long-term value
Other Current Assets: This category of account should be used to record assets whose value can be converted to cash
Other Assets: Choose this option if the asset doesn’t fit any of the two aforementioned account categories
Once done with that, select the “Continue” button
Now, you’re supposed to enter the account name and number for this asset
In the end, hit the “Save & Close” button.

Read Blog: QuickBooks Loan Manager

Enter Journal Entry

Make General Journal Entries can be found under the company menu
For the transaction, choose the date
Please enter the Entry No
Debit the loan asset account by choosing it on the first line
The liability account is then be selected and credited on the second line
Finally, select the “Save and Close” button.

You’ve entered a loan payable in QuickBooks by doing the procedures listed below. Now that you have started making loan payments, you may use this accounting program to keep track of them.

Another Method to Record a Loan Payment in QuickBooks Desktop?

You have the option of manually or automatically entering Record a Loan Payment and Receivable in QuickBooks. Users that consistently pay the same amount at the same time will find automation helpful.

The actions listed below should be followed in order to register a loan payment in QuickBooks Desktop:

The very first, Click on the “Write Checks” under the Banking menu
Select the bank account you’ll use to repay the loan by clicking the dropdown menu
After that, check the date and check number
Choose the bank’s name in the Pay to the Order of field
Move to the expenditure tab, and then:
Select the first line’s liabilities account for loan repayment
For the second line’s interest amount to be recorded, choose the interest expense account
In the end, select the “Save and Close” tab.

You have the ability in QuickBooks Desktop to memories a check. By doing this, QuickBooks will be able to enter loan payments on a recurring basis.

How to Record a Loan Receivable in QuickBooks Desktop?

Receivables from loans can be used for the following purposes:

Keep track of the loans given to a client
Make a note of a loan to an employee
Keep a Loan to Another Company Record

You can keep track of each of these transactions and record them all; recording and receiving repayment are both necessary. To record payable loans in QuickBooks, users first need to create an asset account.

Create an Asset Account to Record Loan

Navigate to the Lists menu
Next, click on the Chart of Accounts
Select: in the type field
Other Current Assets: If the loan is repaid after a year, the other current assets will be used
Other Assets: If the loan will be repaid in the current year
Select the “Continue” tab
After that, enter the Account Name and Description
From the Tax Line drop-down menu, choose a tax
Finally, enter the amount paid for the loan and then hit the “Ok” button.

Record Loan Payments

In the beginning, go to the Banking section
Next, click on the “Make Deposits” option
By using the Payments to Deposit window, associate a payment
Select the Asset Account you created by doing the aforementioned procedures, and then enter the name of the client, business, or employee who will be repaying the loan
Enter the sum that the debtor has already paid
Type in the debtor’s name here
Select the Interest Account created to record interest earned from loan repayment
Any extra payment should be entered and assigned to the appropriate account
At last, click on the “Save and Close” tab.

How to Record a Loan to an Employee in QuickBooks Desktop?

Use advance payment to record loans to an employee in QuickBooks.

Visit here: Employee Not Showing QuickBooks

Below are the methods to accomplishing that:

Select Accounting in the left panel
Click New under the Chart of Accounts tab
Select Other Current Assets under Account Type
Select Employee Cash Advances under Detail Type
Select “Save and Close”.

This is a simple way to record any advance payment or loan made to a worker, independent contractor, or contractor for your business.

In QuickBooks Online

How to Record a Loan in QuickBooks Online?

In comparison to QuickBooks desktop, QuickBooks online makes it simpler to record loan payments. The best course of action is to set up a liability account. This account will be used to keep track of the loan and its payments. You can find out how much you owe by looking at the amount recorded.

Setup a Liability Account for Tracking Loan Payments

Here is how to create a liability account to track the loan and its repayment:

Chart of Accounts can be found by clicking Settings and then choosing it
Select “New” from the menu
Choose the Account Type
If you intend to pay back the loan over the course of a fiscal year, create a loan term liabilities account
If you anticipate paying back the loan at the end of the year, put it in the Other Current Liabilities Account
From the drop-down menu for Details Type, choose Notes Payable
Give the account a name by typing it in
Give the account a meaningful name to make it simple to find it later
When you’re ready to begin keeping track of your finances, click on it
Choose: from the list of choices using the drop-down menu
- Today: to start keeping track of payments and transactions
- Other: starting the tracking on a specific day. A date from when QuickBooks must begin recording the transactions in this account must be entered here
The Amounts area is where you should enter the account’s balance
Fill out the loan’s complete amount
As a liability to your company, make it a negative figure
At last, select the “Save and Close” button.

You now have a liability account where you may monitor loan payments.

Record Loan Amount

It is now time to enter the cash received through the loan after you have set up a liability account to keep track of loan amounts and payments. There are two specific ways to accomplish this.

Option 1: Put Loan Money into the Bank Account

This is the preferable option if you intend to accept the loan and deposit the funds into your bank account. Additionally, if you deposit the money into a bank account that is linked to QuickBooks online, the loan-related transactions will be retrieved and recorded immediately. When you reconcile statements at the end of a fiscal period, all you have to do is match them.

Following the instructions below will allow you to record the loan amount that was instantly deposited into your bank account.

Click New, then choose Journal Entry
If you want to record loan payments, choose the liability account you made
In the credits column, enter the whole amount you intend to deposit into the bank
Select the bank account you’ll be using to keep your loan in on the second line
The loan amount should be entered in the debits column
Select “Save and Close”.

Option 2: Use Loan Amount Instead of Saving into a Bank

Get in touch with your accountant if you intend to use the loan money rather than deposit it into your bank account. It is not advisable for those without extensive accounting understanding to attempt this work because of its complexity.

You can get in touch with us and we’ll assist you discover an accountant if you don’t have one already.

Record a Loan Payment in QuickBooks Online

Everything is set up at this point. All you have to do is make payments and record them in QuickBooks online.

Here’s how you can go about it:

Click Check under the New menu
Enter a check number
Enter the Debit or ETF in the Check number section if you’re planning to use a direct withdrawal
Choose the liability account for monitoring loan payments from the Category drop-down menu
Enter the monthly loan payment amount
To track loan interest, navigate to the second line and choose the cost account from the Category drop-down option
Enter the loan’s interest cost
On subsequent lines, enter any more charges
In the end, click on the “Save & Close” button.

Conclusion

The feature is useful if you need to Record a Loan Payment and Receivable in QuickBooks to an employee in QuickBooks Desktop or Online. When new data is required, you input it into the accounting program used by your business, and your account is automatically updated. I hope you were able to accurately record and modify the interest amount. If you have any specific query, also get in touch with the experts of Live Chat. Contact our specialists at the QuickBooks Helpdesk Team for more information.

Frequently Asked Questions!

How Do I Categorize the Bank Loan Account When I Connect to a Bank Loan Account?

The processes to categories the bank loan account are listed below:

You must first click the Gear Icon to access the Chart of Accounts
After that, press the “new” button and choose “long-term liabilities” from the list of account types
Select the notes payables option from the detail type drop-down arrow
In this case, you must call the account something pertinent, such “Loan for a House”.

What are the Steps Involved in Recording Loans as Advance Payment?

Following are a few instructions that must be followed in order to record a loan to another company as an advance payment:

The Accounting option, which is located on the left panel of the home page, must be selected in the first step
The new selection in the Chart of Accounts menu must now be selected
Navigate to the account type after that and select Current Assets
After that, select the Employee Cash Advances under the Detail Type
After completing the aforementioned procedures, select the save and close option.

What Actions Should I Do in QuickBooks Accounting Software to Adjust a Loan Balance?

The steps you need to take are shown below to change a loan balance in the QuickBooks accounting program:

In the beginning, you must navigate to the list option and choose the Chart of Accounts
After that, select Edit Account by clicking right on the long-term liabilities account
In this step, you must click the Edit Account window’s Change Opening Balance button.
After finishing the aforementioned procedures, click “Save & Close” button.