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C
CFL7
July 11, 2022
Question

Setting up a loan from a business

  • July 11, 2022
  • 1 reply
  • 0 views

I have been off work for a few months.  During my absence, my boss gave a loan to a friend from the business account, and his friend has been paying the money back to the business. Now I am cleaning up the books but don't know how to set this up properly.  Any suggestions?    

1 reply

G
GlinetteC
July 11, 2022

I can help you set up a loan in QuickBooks Online, 

CFL7.

 

You'll have to set up a liability account to record the loan and its payment. This account tracks what owe to the business. 

 

Let me show the following steps:

 

  1. Go to Settings and then Chart of Accounts.
  2. Select New to create a new account.
  3. From the Account Type dropdown, select Long Term Liabilities. 
  4. From the Detail Type dropdown, select Notes Payable.
  5. Give the account a relevant name.
  6. In the When do you want to start tracking your finances dropdown, choose when you want to start tracking the transactions:
  7. Enter the full loan amount as a negative amount. This sets up the liability account with the full loan amount.
  8. Click Save and close.

 

You can check this article for more details: Set up a loan in QuickBooks Online.

 

You might also visit our help page to browse articles that can guide you with your QBO tasks. To get started check our QBO help articles at this link.

 

You can always reply if you need anything else with QBO. We're always here to guide and assist whenever you need help. Have a good one!

C
CFL7Author
July 11, 2022

Thank you for your speedy reply.   Much appreciated, but I do not need to set up a loan as a liability.  The business owner took funds from his business account and loaned them to a friend, thinking we could just set it up in QBO.  I am thinking he has to record this $7500 amount as funds to himself and handle this in his personal finances, but before I tell him that, I wanted to check to see if anyone has a different thought.  He really wants to be able to see and track this from QBO.

Candice C
Candice C
July 11, 2022

Hey there again, @CFL7. 

 

Thanks for reaching back out and giving us some additional information on the loan. I can provide you with the best route to set up this loan properly. 

 

Speaking with an accountant on this situation would be the greatest way to get advice on how to set the loan up properly. If you don't have an accountant, check out this guide to find one near you. 

 

Keep come back and let us know what the accountant says. I want to ensure that you're able to record this in your QuickBooks Online account. Bye for now! 

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