Loan Manager helps calculate interest and payment schedules. Read through if you want to know how to track your new and existing loans, make repayments and run different "what-if" scenarios to compare different loan choices.
Important: When a loan is repaid in regular fixed payments, this repayment usually includes both compounded interest and principal installments for the period. As each successive payment is made the interest portion gradually decreases and the principal portion increases. The QuickBooks Loan Manager creates an Amortization schedule for the duration of the loan, showing how much of each payment is applied to principal, interest and escrow (additional fees related to the loan).
What you need before adding a loan to the Loan Manager?
Before adding loans to the Loan Manager, you'll need to gather your loan information.
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Set up a liability account for the loan in QuickBooks. When you add the account and lender details, include any information you want the Loan Manager to use for tracking, such as the account number and lender contact information. This information can be found on your loan documents. Be sure that you enter the correct opening balance for the account. Otherwise, you will not be able to set up payments from the loan manager.
Set up an expense account for tracking the loan interest.
If you need to make escrow payments to the loan, set up an escrow account for them.
Make sure all transactions for the loan liability and interest accounts are up to date.
- For an existing loan
Make sure all transactions for the loan liability and interest accounts are up to date.
Check to see that you have entered the loan details you want the Loan Manager to use for tracking, such as the account number and lender contact information. This information can be found on your loan documents.
When you're ready to add a loan to the Loan Manager, have your loan documents in hand. You'll need them for the origination date, payment amount, term, escrow amount (if any), interest rate, and other information.
Prepare to track loans in Loan Manager.
Before using QuickBooks Loan Manager, set up the following accounts and vendor in QuickBooks Desktop.
- Create a vendor for the Bank or Financial Institution issuing the loan, if none already exist
- Record the initial loan amount as an opening balance (using New Account window) or as a transaction like journal entry. Make sure to use the loan origination date. If payments have already been made against the loan, you need to enter these as checks, bills or journal entries.
- Set up an Expense type account for interest payments and Fees and charges, if none already exist.
- Create an Escrow account if necessary.
Create a Liability Loan Account.
Launch QuickBooks. Click the "Lists" tab in the top menu and then click "Chart of Accounts" in the context menu.
Click the "Account" button below the list of accounts. Select "New" from the pull-down menu.
Select "Other Account Types" from the accounts list and then lick the down-arrow button to expand the list of available account types.
Click "Other Current Liability" for short-term loans repayable over one year or less or select "Long-term liability" for loans repayable over a longer period. Click the "Continue" button.
Enter a name and reference number for the accounts in the applicable fields. Leave the balance at zero.
Click the "Save and Close" button.
Deposit the Loan Amount.
Click "Banking" in the main menu and then select "Make Deposits" in the context menu.
If the Payments to Deposit window opens, click the "Cancel" button to close the window.
Select the deposit account for the loan in the Make Deposits window.
Enter the name of the liability account you created to track the loan in the field in the "From Account" column.
Type the loan amount in the field in the "Amount" column.
Click the "Save" button.
Add a Loan.
Access the menu "Banking -> Loan Manager" as shown below:
On "Loan Manager" screen, click "Add a loan" as shown below:
On "Add Loan" screen, enter account information for this loan:
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Review the loan information. Click Edit Loan Details if necessary. The loan details you entered show on the Summary tab at the bottom of the Loan Manager.
Recording Loan Payments.
Click "Banking" in the main menu and then select "Write Checks" in the context menu.
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