Monday, November 19, 2018
QuickBooks Loan Manager- Process, implementation and uses
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QuickBooks is a great way to manage your various accounting
operations. There are various tools available in the software that can make
your life easy and one such tool of QuickBooks is the loan manager.
QuickBooks Loan Manager is a great tool which can help you
calculate your interest and payment schedules. So, through this blog, we will
try to understand the loan manager tool of QuickBooks by going through its
process, implementation and uses.
Follow these steps to before using the loan manager
- First of all, you will have to create a vendor for the particular bank which is issuing your loan.
- After that, you will have to enter the initial loan amount as an opening balance. You can also enter the initial loan amount as a transaction like a journal entry.
- Now, set up an Expense type account for interest payments and Fees and Charges.
- Finally, if you find it necessary, then create an escrow account.
The process of tracking loans
- First of all you will have to choose Loan Manager from the Banking.
- Now. Click on Add Loan
- After that, enter the following account information
-Account Name: The account of loan which
you have set up previously
-Lender: The vendor to whom you will make
the payment
-Origination Date: The date from which the
loan started
-Original Amount: The whole amount of loan
-Term: The total time you will take to pay
the full loan in terms of weeks, months and years.
- After filing the above information click on Next
- Now enter the following payment information
-Choose the due date of the next payment
- Payment Amount: The amount paid in during
each period
-Next Payment Number:This is applicable
only if previous payments are not remaining
-Escrow Payment amount:Escrow amount
-Escrow Payment account: Escrow account
- After entering the above-mentioned details, click on Next
- Now, enter these loan information
-Interest Rate- Enter the rate of interest
at which you have taken the loan. If the interest
rate is 4%, then rather than
entering 4% or 0.04, just enter 4
-Compounding Period- Enter the compounding
period mentioned in your loan documents
-Payment account- The bank account through
which you will be paying the loan
-Interest Expense Account- The expense
account which will track the loan
-Fees/Charges Expense account
- After filling these information, click on Finish
You can also use the What
if Scenario tool to see the effects of other payment amounts, repayment
period, etc.
For using the What if Scenario tool, you will have to click
the What if Scenario button which is located on the bottom of the Loan screen. Then,
from the option of Choose a Scenario, you can choose between How much will I Pay with a new loan or Evaluate two new loans.Now, choose a
loan to work with and then enter the loan criteria and click on Calculate to
see the results.
Note- You can also the print the results obtained from the What if Scenario
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