If you have purchased a vehicle recently for business purposes and you want to set up the loan in the QuickBooks and track the monthly payment. You can do so by setting up a liability account in QuickBooks online and it will help you in recording the loan and its monthly online payment in a seamless manner.

You can follow the steps given in the below write up for setting up your loan and its payment.

Steps for setting up a Vehicle loan in QuickBooks

1. Setting Up of Liability Account for a Vehicle Loan

A liability account will help you understand what you owe and you can also track your monthly payment.

For setting up the liability account, please follow the below steps:

1. First Step

First of all, click on settings (gear icon) > chart of accounts > then New to create a new account.

2. Second Step

Now from the Account type drop-down menu choose non-current liabilities in case you are planning to pay off the loan in more than one year. But if you are planning to pay off the vehicle loan within and year, you should select current liabilities.

3. Third Step

In this step, click on the detail type drop-down menu and choose notes payable and write the name for the loan account like “car loan” or “vehicle loan”.

4. Fourth Step

Now you will have to choose the period from when you want to track the loan. You will have to enter the outstanding balance as of the date in the unpaid balance field. After that click on save and close.

2. For Recording The Money Received Through the Vehicle Loan

For recording the loan money, you need to follow the below steps:

1. First Step

First of all, click on New and then choose Journal entry.

2. Second Step

Now select the liability account that you created specifically for this purpose in the first line of the journal entry, and enter the vehicle loan amount in the credit column.

3. Third Step

In the second line of the journal entry, select the bank account from the Account drop-down, and enter the same loan amount on the debit side of the column.

3. For The Recording of The Vehicle Loan Payment

Once you have started making the payment for the loan, you can record it by following the below easy steps:

1. First Step

First of all, click on New > select Check.

2. Second Step

Now add a check number, if you are planning to make the payment through check. But if you are making the payment through some other mode, then you will have to enter the payment mode name like electronic transfer or debit, etc.

3. Third Step

For entering the details in the category section, select the liability account from the category drop down and enter the payment amount in the first line. Then in the second line, you need to select the expense account for the interest portion again from the category drop-down and enter the interest amount.  After that click on save and close.

If you get stuck anywhere in the process, feel free to get in touch with SMB QuickBooks Technical Support Team, Which is available 24/7 on smbaccountants.com.

Further Reading