How to Set Up a New Loan Using Bank Feeds in QuickBooks Online

Managing loans in QuickBooks Online (QBO) can be tricky if you’re not sure how to integrate bank feeds with your accounting system. Whether it’s a farm loan, operating loan, or business loan, QuickBooks Online provides tools to simplify recording, tracking, and reconciling loans without duplicating transactions.

In this comprehensive guide, we’ll explain how to set up a new loan in QuickBooks Online, including how to:

• Use bank feeds to record loan proceeds
• Add loan fees from bank feeds
• Record loans without duplication
• Handle loan accounting for operating and farm loans

For hands-on assistance, call 📞 844-753-8012 to speak with a QuickBooks expert.

Understanding Loans in QuickBooks Online

Loans are a common source of capital for businesses, and accurate recording is critical to maintain proper financial statements and ensure smooth reconciliation.

When you receive a loan, your bank account is credited with the loan proceeds, and your business assumes a liability for repayment. In QBO, bank feeds allow you to automatically import the loan funds and related fees, which simplifies loan accounting.

Also Read: How to Remove Transactions from the Reconcile List Without Deleting Them in QuickBooks Desktop

Key Loan Terminology in QuickBooks Online

1. Loan Proceeds – The funds you receive from a lender, typically deposited into your bank account.
2. Loan Fees – Charges associated with obtaining the loan, such as origination fees or service charges.
3. Liability Account – The account in QBO where the loan is tracked. Usually a Long-Term Liabilities or Other Current Liabilities account.
4. Bank Feed – A connection between your bank and QuickBooks that imports transactions automatically.

Benefits of Using Bank Feeds for Loans

Using bank feeds to record loans in QBO ensures:

• Accurate recording of loan proceeds without duplication
• Easy addition of loan fees
• Simplified reconciliation and reporting
• Reduced risk of manual errors

Step-by-Step Guide: How to Set Up a New Loan in QuickBooks Online

Step 1: Create a Loan Liability Account

1. Go to Settings → Chart of Accounts.
2. Click New.
3. Select Liability as the account type.
   • For long-term loans, choose Long-Term Liability
   • For short-term or operating loans, choose Other Current Liability
4. Name the account (e.g., “Bank Loan – ABC Bank”).
5. Save the account.

This account will track the outstanding balance of your loan in QBO.

Also Read: How to Resolve the Missing PDF Component Error in QuickBooks Desktop Pro Plus (Windows 11)

Step 2: Connect Your Bank Feed

1. Go to Banking → Add Account.
2. Search for your bank and log in using your credentials.
3. Once connected, QBO will import all transactions, including the loan proceeds and loan fees.

Pro Tip: Make sure your bank feed is current, so all recent deposits and fees are available for matching.

Step 3: Identify Loan Proceeds in Bank Feed

1. In the Banking tab, look for the loan deposit.
2. Click Add or Match.
   • Use Add if this is a new loan not recorded in QBO.
   • Use Match only if a liability account has already been created to avoid duplication.

Step 4: Record Loan Proceeds Without Duplication

To record loan in QBO without duplication:

1. Click the deposit in the bank feed.
2. Choose Transfer or Add.
3. Select the loan liability account you created.
4. Enter any loan reference details, such as loan number or lender.
5. Save the transaction.

This ensures the deposit is recorded as a liability, not income, avoiding errors in your Profit & Loss statements.

Also Read: How to Match a PayPal Payment to Multiple Expenses in the New Connector (QuickBooks Web)

Step 5: Record Loan Fees

Loan fees often appear as separate deductions in your bank feed. To add loan fees from bank feed QuickBooks:

1. Click the fee transaction in your bank feed.
2. Categorize it as an Expense under a suitable account like Bank Fees or Loan Fees.
3. Link it to the loan liability account if your lender deducts fees upfront.

This keeps your books accurate and ensures the net loan amount matches your bank account.

Step 6: Reconcile Loan Transactions

After adding the loan and fees:

1. Go to Accounting → Reconcile.
2. Choose the bank account where the loan was deposited.
3. Match the loan deposit and any fees to the corresponding transactions.
4. Ensure the total balance in QBO reflects your actual bank balance.

Using bank feeds ensures QuickBooks Online loan setup without journal entry, which reduces manual errors.

How to Record a New Loan When Funds Are Already in Bank Feeds

Sometimes, you receive the loan funds before setting up the liability account in QBO. Here’s how to handle it:

1. Create a loan liability account (Step 1).
2. In the bank feed, locate the deposit.
3. Click Add → Select the newly created liability account.
4. Enter details and save.

This method ensures accurate recording without the need for journal entries.

Recording Operating Loans in QuickBooks Online

Operating loans are short-term loans used for business expenses. To record them:

1. Create a Current Liability account for the loan.
2. Use bank feeds to add the deposit to this account.
3. Categorize any fees as expenses.
4. Reconcile regularly to ensure your bank account and QBO match.

QuickBooks Online Farm Loan Accounting

Farm loans may require specialized tracking due to seasonal income and long-term repayment schedules. In QBO:

1. Create a separate liability account for the farm loan.
2. Record deposits and fees through bank feeds.
3. Track repayments and interest separately as expenses.
4. Reconcile frequently to maintain accurate financial statements.

Bank feeds streamline farm loan accounting by automatically capturing deposits and loan fees.

Tips for Smooth Loan Setup in QuickBooks Online

1. Always Create a Liability Account First – Prevents duplication.
2. Use Bank Feeds for All Loan Transactions – Import proceeds and fees automatically.
3. Avoid Journal Entries if Possible – Bank feeds reduce manual errors.
4. Categorize Loan Fees Correctly – Keep financial statements accurate.
5. Reconcile Monthly – Ensures your bank and QBO balances match.
6. Add Detailed Notes – Include loan number, lender, and purpose for auditing.

Common QuickBooks Online Loan Setup Issues

Issue	Cause	Solution
Duplicate loan recorded	Manually entered deposit before bank feed	Remove duplicate, record only via bank feed
Loan fees not categorized	Bank feed imported as miscellaneous	Categorize as Loan Fees or Bank Fees
Balance doesn’t match	Partial deposits or fees	Verify all deposits and fees are added to liability account
Journal entry required	Bank feed not connected	Connect bank feed and add loan transactions

For complex loan setups or troubleshooting, call 📞 844-753-8012.

Final Thoughts

Setting up a new loan in QuickBooks Online using bank feeds streamlines accounting, prevents duplication, and ensures accurate tracking of proceeds and fees. Key takeaways:

• Create a loan liability account first.
• Use bank feeds to add the loan deposit and fees.
• Categorize loan fees correctly.
• Reconcile monthly for accurate balances.
• Use for operating loans, farm loans, or business loans.

For professional guidance on QuickBooks Online bank feeds loan setup or troubleshooting, call 📞 844-753-8012.

FAQs