QuickBooks loan manager establishes loans in QuickBooks relying on the data given on the long-term liability & other current liability bills. The loan manager enables you to track both fundamental and interest without glancing over the amortization tables to evaluate the amounts. Ultimately, these amounts will be entered manually the use of the journal entries.
QB Loan Manager establishes ‘Amortization schedules’ depending on the following steps:
- Loan A/C chosen from COA
- The Loan Amount
- Origination date
- First payment date
- The fee amount
- The payment issue
- Escrow payment amount
- Escrow payment account from the Chart Of Account
- Interest rate
- The Compounding period.
- Price A/C selected from COA
- The interest expense account is selected from COA
- Charges or fees account selected from COA.
The way to installation a Loan in QuickBooks?
- Firstly, you have to select Banking, loan manager from the menu.
- Now, click on add a loan and fill in all the required info.
- From the Account name drop-down list, select long-term liability accounts for the loan.
- After that, from the Lender drop-down list, select the Payee.
- Fill the Loan Origination Date.
- Next, from the terms list, you have to select Weeks, Months, or Years and click on next.
- Select a payment method and fill in the interest rate.
- After that, select a Compounding period.
- From the payment Account list, you have to choose a bank account.
- Now, Choose the interest expense account, Click the Finish.
How to Enter or record a Loan in QuickBooks
Step 1: Set up a Business loan
- Initially, select the Gear icon.
- And Then Select Chart of Accountants from the Company list.
- Click on New & change the Account type to other current Liabilities or long-term Liabilities basis to your loan type.
- Now, visit Detail Type and Change it to Loan Payable.
- Enter the name of the account & then click on save and close.
Step 2: Enter an opening Balance
- First of all, choose the Plus icon (+) and then select Bank Deposit from the Other list.
- Now, visit the drop-down list and select the account where you want to deposit the loan finances.
- You have to enter the deposit date.
- Finally, click on save and close.
Step 3: Record a Loan Payment
- Firstly select the Plus icon (+).
- Choose Check/Check from the Vendors list.
- You want to add a Check number if you send an original check.
- In case, you do a direct withdrawal of EFT, enter Debit or EF in the Check/Check # field.
- After that, you need to enter the following info in Account details:
- First Line: Liability account for the loan & the amount of payment
- Second Line: Expense account for the interest & the amount
- Succeeding lines: Any additional fees along with the right accounts.
- Finally, select Save and close.
A way to prepare Loan tracking in QuickBooks loan Manager
Before starting to apply the loan manager in QuickBooks, it’s important to set up the below a/c and seller in Quickbooks desktop.
- First of all, if no existing dealer has granted a loan, then create a dealer here for the bank/ financial organization that is issuing it.
- Put in the loan origination date. In case the payments are already made against the loan, here you fill in those checks, journal entries or bills.
- Now set up an account much like a cost Account to store interest payments & charges, if there was none previously.
- Now make an ‘Escrow Account’ if required.
What’s the Escrow Amount?
The Escrow is a selected part of a loan that is saved in an account by means of a third-party until all the situations of the loan are fulfilled. The Escrow account is much like QuickBooks Asset Account that monitors the Escrow portion of the loan payment. The account is primarily used to pay taxes and insurance.
That is the way you set-up an Escrow Account:
- Firstly, visit ‘Lists’ menu, and select COA (Chart of Accounts)
- Click on ‘Account’ option and select ‘’
- Now select ‘different account type’ and then select ‘other current asset’ and press continue.
- Now fill the name of the account in the ‘Account name’ section.
- When at the ‘Description field,’ now you enter a Short note or explanation with the account (that is optionally available)
- Select save and close.
How do we track Loans and repayments through QuickBooks loan manager?
- Go to the Banking menu & press ‘loan’
- Select ‘Add Loan’
- Next, Enter a/c data of the loan and choose Next
- Account name – Here placed the loan account previously made
- Lender – the vendor who will get payments
- Origination date – Date from which the loan starts or originates
- Original amount – The Complete initial amount of the loan
- Term – the full time it will take to repay the loan in a specific duration which includes weeks, months or years.
- Enter price data of loan and press Next
- Select the ‘Due Date of next ’
- Payment Amount – The quantity to be paid in each detailed period
- The Next Payment number – it is applicable simplest if the previous payments are already made.
- Escrow payment – the Escrow amount
- Escrow payment a/c – the Escrow account
- Select ‘Alert me ten days earlier than the payment due date (non-compulsory)
- Now enter interest info of the Loan & press Finish.
- The interest rate- Fill in the interest charge of the loan. As an example, if the interest rate is 5 % then input 5. Do not put 5% or 0.05.
- The compounding duration- fill in the period here as according to the information specified in the loan documentation.
- Payment Account- here put in the Bank account that you may use to pay off the loan.
- Interest Expense A/c- this account tracks the interest.
- Fees/charges expense a/c- it will track the fees/expenses of the loan.
- Finally, the overview of the loan info. To do that – Select ‘Edit loan info’ if required. The summary tab at the bottom section of the loan manager suggests the loan information.
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