Mortgage Lender - getting started

Welcome to the Community, @wprince30,

I'm here to provide you with information about setting up accounts and recording loan payments in QuickBooks Online (QBO).

There are different ways to record a loan in QBO depending on its purpose. Let me guide you on how:

Option 1: Use loans to close open invoices

Step 1: Create an account to track the loan and its payment.

1. On your QBO account, go to the Gear icon, then select Chart of accounts.
2. Click on New, then select Assets.
3. From the Save account under and Tax form section dropdown, select Loans to Others.
4. On the Account name field, enter a recognizable name like "Loan - customer name".
5. Select Save without entering an opening balance.

Step 2: Create a journal entry.

This will create the opening balance of the loan and adds credit for that customer's accounts receivable. You can then apply the credit to open invoices.

1. Go to the +New, then select Journal entry.
2. On the first line, from the Account dropdown, choose the account you created to track the loan.
3. On the Debits field, enter the loan amount.
4. On the second line, select the accounts receivable from the Account dropdown.
5. From the Name dropdown, select the customer you want to give a loan to.
6. Once ready, click on Save.

Step 3: Record customer payments.

Take note, if you're charging the customer with interest, enter the principal amount of the payment on the first line. On the second line, use your Interest Income account and enter the amount of the interest.

Moreover, QBO does not automatically calculate the interest. To manually calculate the interest due on the current payment, take the loan balance and multiply it by the interest percentage, then divide by 12 for one month's interest.

1. Go to +New, then select Bank deposit.
2. From the Account dropdown, select the account you used to fund the loan.
3. On the first line, from the Received dropdown, select the name of the customer with the loan.
4. From the Account dropdown, select the account you created to track loans.
5. Enter the amount that they paid in the Amount dropdown. Important: If you charge customers with interest, on the second line, select the account you use to track interest income and enter the amount of the interest.
6. Fill out the rest of the fields accordingly.
7. Once ready, click Save and close.

For detailed steps, kindly visit: Track customer loans in QuickBooks Online.

However, I'd still recommend consulting your accountant to seek help in properly handling this. They can also provide you with the right accounts to use based on your business. If you’re not affiliated with one, you can visit our ProAdvisor page and look for one from there.

I'll also share this article that'll serve as your reference if you want to run balance sheets and profit and loss reports to manage your business: Financial reports in QBO. 

Feel free to leave a reply if you require further assistance with setting up and receiving customer loan payments in QBO. The Community team always has your back. Have a great one!