This is the first part of a series of Quickbooks tutorials. The series of articles assume that you have a background in using Quickbooks. Also, the steps below apply to Quickbooks desktop. We use Quickbooks UK Enterprise 13 but menus are the same across most Quickbooks desktop versions.
Disclaimer: We are not Quickbooks experts. We have used Quickbooks since the start of our business. We are here to present some workarounds we use to enter transactions in Quickbooks.
How to enter customer loans in Quickbooks
Sometimes customers won’t just buy stuff from you. There might come a time that customers would ask for a loan from your company. Since you did not sell anything, you can’t invoice your customer. A simple solution would be to create a Notes Receivable account in your Chart of Accounts to keep track of the loan. When the customer makes a payment, you can use the Make Deposits feature to record the payment.
Record customer loans in Quickbooks
Prerequisites: Customer loans are recorded as Other Current Asset in Quickbooks. The first step is to create an Other Current Asset Account. We created one and named it Notes Receivables. Interest payments can be tracked using the default Interest Income account under Other Income.
- Create your Notes Receivables account. Open your Chart of Accounts and then Notes Receivables under Other Current Asset
- When you issue the loan, write a check to the customer. Click Banking and Write Check to write the check
- In the check screen, choose the Banking Account where you took the loan money and enter the full loan amount
- In the same check screen, choose the Customer Name under Pay to the Order of
- In the same check screen, under the Expenses tab, choose Notes Receivables for account
- Voila, you have recorded a customer loan
- Record payments of customer loans in Quickbooks
If the customer pays you, you can use Make Deposits under Banking
- Click Make Deposits
- Once the window opens, record the following:
- In the Deposit To option, choose the bank account where the payment will go to
- In the Received From option, choose the customer name
- In the From Account, choose your Notes Receivables account
- Fill in the amount. The amount can be the full amount or a partial amount
- For interest payments, fill out a second line with the exact same choices except for the From Account option. For interest payments, choose Interest Income
- If your customer will make multiple payments to cover the full amount of the loan, repeat the process
There you go! That was not so hard after all. That’s how you record customer loans in Quickbooks.