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joseph8
July 15, 2021
Question

Using payroll deductions to recover loan to shareholder

  • July 15, 2021
  • 1 reply
  • 0 views

I'm using Quickbooks Online with the payroll module and direct deposit; to start.

One of our shareholders is going to borrow some money from the business, and I'd like to then have the shareholder "repay" that loan by doing regular payroll deductions throughout the rest of the year.  I already have done one deduction like this previously, but I'm unclear on how to handle the back-end of this.

When I issued the paycheque with a deduction to cover the repayment, it records a credit to a "loan repayment" account.  Do I then simply have to do a manual entry to debit the "Loan Repayment" account, and credit the "Loan to Shareholder" account to balance it out?

1 reply

J
JamesM4
July 15, 2021

Hello joseph8,

 

Recording your transactions the right way is a good exercise for preventing errors in your books. I'd be happy to steer you in the right direction so you can focus on doing the things you enjoy. 

 

To ensure accuracy in your books, I recommend contacting an accounting professional to get expert advice on how to enter the transactions in your books. Doing this will help prevent any future discrepancies in your books. You can also reach out to accounting professionals on our site using this link here. 

 

I'll also leave this question here so other accounting professional members can chime in. Let me know if you have other questions. I'm here to help.

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