How to record a loan repayment?

I've got you, @Julie100. I can help you choose what specific category you can use in recording your loan repayment in QuickBooks. 

I'll make sure that you can record your repayment transactions accordingly in your account. Below is the step-by-step procedure on how to track loans in QuickBooks Online. 

If you don't have a liability account set up in your account yet, I'd recommend creating it first. This way, we can track your loan repayment transactions accordingly. 

You can do the following:

1. Go to the Accounting tab on the left side, then choose Chart of Accounts. 
2. Click the New button.
3. In the Account Type drop-down, pick either Long Term Liabilities or Current Liabilities (pay off by the end of the current fiscal year).
4. Select Loan Payable in the Detail Type field. 
5. Type a unique name in the box. 
6. Click Save and close. 

After that, create a Journal Entry to record the money you got from the loan. I'll show you how: 

1. Go to the +New and select Journal entry.
2. Select the liability account you just created from the Account drop-down and enter the loan amount in the Credits column.
3. Select the appropriate bank account from the box and type the amount in the Debit field. 
4. Click Save and close. 

Once done, you may now record the repayment by creating a check. Do the following: 

1. Go to the + New and select Check. 
2. In the Category drop-down, choose the liability account you previously created. 
3. Enter the payment amount in the field.
4. Pick the expense account for the interest from the Category drop-down and enter the amount.
5. You can add another line if you want to record any additional fees. 
6. Click Save and close. 

See this article for the complete steps: Set up a loan in QuickBooks Online.

On top of that, I'd suggest consulting an accountant as well. They can review your business needs and guide you on what specific category to use. Also, they maybe have other ways to record the loan repayment that meets your business needs. 

Once everything is in place, you can always run the quick loan report by going to the Chart of Accounts page. This way, you can review the transactions with the remaining balance.

I've also added articles about managing vendor transactions, information, and related topics. 

• Track customer loans
• Manage Vendors and Expenses

If you have a question about loan payments, feel free to ask me and I'm always here to help you anytime. Keep safe.

Hi @Julie100 

Your loan & repayments seem to be set up correctly.  Leave those as they are.

The payment from the customer is separate (as far as the accounts & HMRC are concerned).

The issue here is why the customer is paying - what are they getting in return?

If they are getting an asset (or use of that asset or any service) in return for the payment then that should be reflected in the accounts - i.e. an invoice raised - and the payment should be entered as income (i.e. taxable).

The business cannot simply receive money & bypass the taxman (which is what it would look like if the customer simply repaid the loan).

Hope this helps.