QuickBooks Loan Manager is a highly beneficial tool for small and mid-sized businesses. It enables Bookkeepers or Accountants to easily track loans, calculate interest and schedule payments. In this blog post, we will show you how you can record a loan payment in your QB loan manager.
You can also choose to connect with the QuickBooks Support Team and ask them to record a loan payment, track your new and existing loans, do repayments and much more. Call on the 24×7 available QuickBooks Enterprise Support Phone Number +1888-382-7559 to have a conversation with the Intuit certified QuickBooks Experts.
Steps To Record A Loan Payment In QuickBooks Loan Manager
Step 1: Set Up The Accounts For QuickBooks Loan Manager
Note down the accounts that you wish to set up. If these accounts are already set up then move on to the next step.
Set Up A Liability Account
The first step is to set up a liability account in your QB loan manager. It is a crucial step as these accounts will be required later for recording a loan.
- Open Lists menu and click on the Chart of Accounts
- Choose Account
- Click on the New
- Choose Loan and select the Continue
- Type in the Account Name and choose Enter Opening Balance.
Important: You have to record the early loan amount as the opening balance. Ensure that you are using the loan origination date.
Create A Vendor
In this step, we will create a vendor for the bank or financial institution which is issuing the loan.
- Go to the Vendors menu and click on the Vendor Center
- Choose New Vendor and type in the vendor’s name of the bank issuing the loan.
- Fill all the fields with appropriate responses.
- Click on the OK
Set Up An Expense Account
We are setting up an expense account as it enables the users to track the interest payments, fees and charges very easily.
- Open the Lists menu and click on the Chart of Accounts
- Open the Account dropdown window and click on
- Choose Expense and click on the Continue
- Enter the account name for interest payments, fees and charges.
- Choose Save & close
Set Up An Escrow Account
Escrow is an amount (part of loan) which is held in an account by a third-party. This amount will be release if you meet the conditions of the loan. We also call this account the QuickBooks Asset Account. You can use the QB Asset Account for keeping an eye on the escrow amount of the loan. Generally, people use Escrow accounts for paying their taxes and insurance money.
- Go to Lists menu and open Chart of Accounts.
- Open the Account drop-down menu and click on the New
- Choose Other Account Types.
- Now, select Other Current Asset.
- Provide the account name.
- Click on Save & Close and move on to the next step.
Step 2: Record & Track Your Loans
If you followed all the steps given above then you will be able to track your loan in QB Loan Manager now.
How does QuickBooks Loan Manager works?
If you are paying the loan amount from regular fixed amounts then the repayment amount will include the compounded interest and principal installments for the period. With each payment that you make, the interest will decrease and the principal amount will increase. QuickBooks Loan Manager will automatically create an Amortization schedule for you. This schedule will have all the relevant information related to principal, interest and escrow.
Note: Additional fees related to the loan will be applied.
- Open the Banking menu and click on Loan Manager.
- Choose Add Loan
- Provide accurate account information for the loan.
- Click on the Next
- Account Name: Information of Loan Account that you earlier set up.
- Lender: All the payments that you make will be sent to Vendor/Lender.
- Origination Date: Date from which the loan begins.
- Original Amount: Full initial amount of the loan.
- Term: Total Time required to repay the loan in full in weeks, months or years.
- Provide the payment information for the loan and click on the Next
- Choose the Due Date of Next Payment.
- Payment Amount: Amount that you wish to pay each period.
- Next Payment Number: Only valid if earlier payments have been sent to the lender.
- Escrow Payment Account: Escrow account.
- (Additional) Choose Alert me 10 days prior to a payment is due.
Important: If you have already made any number of payments against the loan the enter them as checks, bills or journal entries.
- Provide interest information of the loan.
- Click on the Finish button to finalize the process.
- Interest Rate: Provide the interest rate for your loan. For a 5% interest rate, type in “5”(no quotes), and not “5%” or “0.05”.
- Compounding period: Check your on your loan documentation to find the compounding period.
- Payment Account: Account that will be used to repay the loan amount.
- Interest Expense Account: An Expense account that you will be using for tracking the interest.
- Fees/Charges Expense Account: Expense account that will be tracking fees & charges of your loan.
- Double-check the loan information and make sure that all the information is correct before moving forward. Choose Edit Loan Details if you want to change any information.
Important: Go to the Summary tab which can be found at the bottom of the QuickBooks Loan Manager if you want to check the loan details.
Step 3: Asses your loan with What If Scenarios tool
Use the What If Scenario Tool if you want to view the effects of other payment amounts, repayment period etc.
- Choose the What If Scenario option which you can find at the bottom of the QuickBooks Loan Manager window.
- From the drop-down menu, choose either How much will I pay with a new loan? or Evaluate two new loans
- Select a loan that you want to work with.
- Provide the loan criteria and choose Calculate
- Choose Print option if you want to print out the information.
- Click on the Ok
24×7 QuickBooks Support Services
We are hoping that you are ready to use the Loan Manager of QuickBooks by reading this step-by-step blog post. But if you find the process to set up QuickBooks loan manager a bit complex then do not hesitate to give us a call on our toll-free number.
If you are facing any difficulty while setting up the loan manager in QuickBooks or you want to speak with the QuickBooks Experts then call the toll-free QuickBooks Support Phone Number +1888-382-7559 or click on the chat icon.