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All that you need to know about QuickBooks Loan Manager and how you can track your loan with the help of Loan Manager:

QuickBooks is unarguably one of the best accounting software available in the market. From small to medium-sized businesses, everybody nowadays depends on this application as it has many perks. Financial management, handling the inventory to bookkeeping, payroll management and more this application does it all.

A very powerful feature of QuickBooks is the QuickBooks Loan Manager. Many people are not much aware about its usage and its benefits. So, in this blog we will discuss in detail about this features of QuickBooks desktop. Thus, make sure to read this post till the end, or you can also get in touch with our support team via our toll-free number i.e. +1-844-521-0490. Calling us anytime will help you in getting the best possible and most relevant information. Our experts and certified accounting professionals will be happy to help you.

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What is QuickBooks Loan Manager?

QuickBooks Loan Manager - Screenshot

The QuickBooks Loan Manager is basically a tool for the companies to keep a track of the unpaid loans and change the installments if any of them are missed out. Below are the effective features of this very efficient tool.

  • This tool diversifies the entire loan amount into interest and principle, thereby helping in the timely loan repayment.
  • It permits you to add or remove the loans that needs to be tracked and also set up the loan payments for them.
  • The repayment schedules of the loans can be viewed through this tool and you will be able to analyse the various scenarios for loans.

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The QuickBooks Loan Manager calculates the amortization schedule at the current rate provided by the user and thus you will not need to work on it each and every month.

  • It also sets up the record of amortization on the basis of following inputs:
  • Loan A/C that you choose from the Chart of Accounts
  • Loan Amount
  • The date on which you took the loan
  • Date of first installment
  • Issue of the payment
  • Amount of the Escrow Payment
  • Account for the Escrow payment in COA
  • Rate of interest on the loan
  • Compounding period
  • Payment A/c, interest expense a/c, and fees or charges a/c chosen from Chart of Accounts.

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Setting up the accounts for QuickBooks Loan Manager

Below are the accounts you need to create in order to set up the Loan Manager in QuickBooks:

Step 1: Set-up a Liability Account

To record loan later while choosing an account:

  • First go to the list’s menu and then open Charts of Accounts (COA)
  • Now click on the Account drop down and choose New tab
Set-up a Liability Account - Screenshot
  • After this click on Loan and then select the Continue tab
  • You have to now fill in the field of Account Name and then click on Enter Opening Balance
  • Click on OK and after that Save & Close.

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Step 2: Create a Vendor

To enter the name of the bank or financial institution that has issued the loan:

  • In the Vendor Menu click on Vendors Centers and then select the option New Vendor
Create a Vendor - Screenshot
  • After that provide all required details and then click on OK button.

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Step 3: Set-up an expense account

To keep a track of the interest payments or fees and chars:

  • First go to Lists and then open Charts of Accounts (COA)
  • Now click on Account drop down and then select New
  • After this tap on Expense and then choose Continue
  • Fill up the account name for the interest payments or fees and charges
  • Finally click on Save and close.

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Step 4: Set up an escrow account

The escrow is basically a small amount of loan that is retained by the third-party account till the time the terms of the loan are met. It is actually an asset account for QuickBooks to keep a track of the escrow amount of the loan. It is also used to pay the taxes and insurances:

  • First Go to the Lists menu and then open Charts of Accounts (COA).
  • After this click on Account drop down and choose New
  • Now you have to open the Other Account Types and then select Other Current Asset
  • Click on Continue and then provide the account name
  • Now click on Save and Close.
loan manager in QuickBooks-screenshot

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How to access your loans with what If Scenario tool in QuickBooks 2021 Loan Manager?

In QuickBooks 2021 Loan Manager you can use the What if Scenario tool by viewing the effects of payment amounts of other credits, their payment period etc. You can use this tool to manage the loans in QuickBooks by reading the following steps.

  • At the bottom of the Loan Manager screen, you will come across the What If Scenarios option
  • Select it and then click on the Choose a scenario drop down.
  • Now you have to choose either of the two options – How much will I pay with a new loan? Or Evaluate two new loans.
  • After this select the Choose a loan drop down and then click any of the loan in order to open it.
  • Once done, fill in the loan criterion and then click on the Calculate tab.
  • In case, you want to take out print out of the results then click on Print and then select OK button.

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How can you record and track your loans in QuickBooks Loan Manager?

Before you start with the steps to add and track loans in QuickBooks Online Loan Manager, it is important to know that if the loan is repaid in fixed payments at regular intervals, then the repayments are sum of compounded interest as well as principal amount installments for the entire period. As the loan period moves towards the end the amount of interest also decreases and the principal amount increases. A good thing is that the QuickBooks Loan Manager creates an amortization schedule till the duration of the loan in order to show how much principal, interest as well as escrow is applied to each of the installments being paid.

  • Firstly, click on the banking menu and then select the Loan Manager
QuickBooks Loan Manager - Screenshot

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  • After this select Add Loan and then provide the following account details of the loan.
    • Account Name: The same account that has been set up using the steps mentioned earlier
    • Lender: The vendor which gets all the payments
    • Original Date: The loan processing date
    • Original Amount: Initial full amount of the Loan
    • Term: The duration decided by both parties to repay the entire loan
  • After this click on Next and then fill up the following payment details of the loan:
    • Select next payment’s Due Date
    • Payment Amount: An installment amount to be paid each month for a tenure decided by both parties
    • Next Payment Number: This is optional for those who have already made previous payment
    • Escrow Payment Account: Escrow Account
    • Choose Alert me 10 days before a payment is due option to avoid any penalties, however it is an optional step.
  • You have to now provide interest information of the loan and then choose Finish.
    • Interest Rate: Provide the interest rate that was decided on the loan. For 5% interest rate you just have to type 5.
    • Compounding Period: Provide the period of the loan mentioned in the loan documentation.
    • Payment Account: Bank account from which the loan installments will be paid.
    • Interest Expense Account: In order to track the interests Expense account is created
    • Fees or Charges Expense Account: The Expense account will be used to track fees as well as charges of the loan.
  • Now click on Finish and check all the loan related information you have provided and if required make changes by clicking on Edit Loan Details.

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Though we have discussed in details about QuickBooks Loan Manager, if you have any query regarding the same then you can seek assistance from the QuickBooks enterprise support team who are available all throughout the day to guide you.

You can simply make a call at our toll-free number i.e. 1(844)521-0490 and speak to our experts and certified accounting professionals and get answers to all your queries. Thus, do not hesitate in ringing up anytime, our professionals will be there to help you.


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