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ddisimone
November 10, 2020
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How to set up a loan to an external company.

  • November 10, 2020
  • 1 reply
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We are a company that has been in business for 5 years, and have transitioned to QuickBooks this year. The company has an outstanding loan to an external company (monies loaned several years ago) and has collected payments against this loan this year. How best can we set up this loan in QB so that it has a starting balance, and then, against which, we can apply payments as they come in? This is a simple, no-interest loan with no ties to invoices or services from the company, so we will only record deposits from it. Thanks in advance.

Best answer by DivinaMercy_N

Thanks for getting back here, @ddisimone.

 

You can follow the steps provided by my colleague, MirriamM in setting up the loan and recording the payment. You have to make sure that the loan amount is recorded correctly. For visual reference, please see these screenshots:

 

Creating a liability account to record the loan:

Record the money you got from the loan:

Record a loan repayment:

 

Here's a great source where you can find articles that can help you in managing your books in QuickBooks, please visit our QBO help articles page. This includes topics such as reconciliation, track income, and expenses, run reports, etc.

 

Keep me posted if you have any other concerns about recording loans in QBO. I'm always here to help. Have a great day ahead.

1 reply

M
MirriamM
November 10, 2020

Hi there, @ddisimone.

 

Let me share information on how you can set up a loan in QuickBooks Online (QBO).

 

To get started, you'll need to set up a liability account to record the loan. Here's how:

  1. Click the Gear icon at the top.
  2. Select Chart of Accounts. 
  3. Click the New button at the upper right hand.
  4. In the Account Type drop-down, select Long Term Liabilities. However, if you're going to pay the loan off by the end of the year, click on Other Current Liabilities.
  5. Choose Notes Payable from the Detail Type drop-down. 
  6. Enter a name for the account.
  7. Type in the amount of the loan as a negative amount in the Amount field.
  8. Hit Save and Close.

Once you're ready to record the payment, follow step 3 on this article: Set up a loan in QuickBooks Online.

 

In case you want to run reports to know where your company stands in terms of income and expenses, visit this resource: Common custom reports in QuickBooks Online.

 

If you have any other questions, don't hesitate to reach back out. I’m here to answer them for you. Take care.

D
ddisimoneAuthor
November 10, 2020

Thank you for the quick reply. The directions are clear for setting up a loan that one would be taking out in the name of the company but my situation is the opposite. We loaned out money several years ago and there is a balance as of 01 Jan 2020, the beginning of our fiscal year. I am trying to understand how to set up that loan to show we have loaned the money and are receiving payments against it. Can you advise on this situation?

    DivinaMercy_N
    DivinaMercy_NAnswer
    November 10, 2020

    Thanks for getting back here, @ddisimone.

     

    You can follow the steps provided by my colleague, MirriamM in setting up the loan and recording the payment. You have to make sure that the loan amount is recorded correctly. For visual reference, please see these screenshots:

     

    Creating a liability account to record the loan:

    Record the money you got from the loan:

    Record a loan repayment:

     

    Here's a great source where you can find articles that can help you in managing your books in QuickBooks, please visit our QBO help articles page. This includes topics such as reconciliation, track income, and expenses, run reports, etc.

     

    Keep me posted if you have any other concerns about recording loans in QBO. I'm always here to help. Have a great day ahead.

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