How to Set up a Line of Credit in QuickBooks?

by James Antonio

Line of credit is nothing less than a lifeline for businesses and organizations since it offers immediate financing that is required to manage the payroll and handle day-to-day expenses. When you set up the line of credit in QuickBooks, the cash flow gets simplified; savings get boosted along with expense management.

Read on to know what this line of credit in QuickBooks is all about, why do you need to set it up, and how it can be set up in the right method.

What is the Line of Credit in QuickBooks?

Line of credit means a revolving account that allows businesses and customers to acquire some funds when needed. The fund acquired is used to repay in similar monthly interest till the time the loan is clear.

Add to it, clients can redraw these funds. Line of credit is like a lifeline for small companies and organizations since it offers instant funds which are needed for payroll and meeting daily expenditures.

Here are the benefits of using Line of Credit in QuickBooks:

  • Simplified cash flow
  • Increased savings
  • Better expense management

Why do you need to Set up a Line of Credit in QuickBooks?

For 8 out of 10 businesses, a line of credit is often the life of a business, especially when the business is small or a startup.

By setting up a line of credit for your business, you can help your business to:

  • Boost business savings
  • Make cash flow convenient
  • Move credit funds in a completely different account
  • Documents payment of expenses
  • Amplify expense management
  • Utilize the money for crucial requirements
  • Document interest charges

Note: Line of credit in QuickBooks is an important aspect for business, especially during a financial crisis. Hence, it cannot be avoided in any situation for a business to prosper.

How to Set up a Line of Credit in QuickBooks?

A line of credit can be monitored with two sets of accounts that are interest and principal account.

Here are the important steps to set up a particular Principal account in QuickBooks:

Step 1: Navigate to Settings and then select Chart of Accounts

Step 2: Select on the option New

Step 3: Locate the dropdown menu in the particular Account type section and select current liabilities

Step 4: You can add a new name to the account if you wish

Step 5: Select Save and Close

Step 6: See the transaction date and then press Yes

Here is how you set up the particular Expense accounts for your line of credit:

Step 1: Navigate to the Settings and then choose Chart of Accounts

Step 2: Choose New

Step 3: From the particular Account Type, select Expenses from the dropdown menu

Step 4: From the particular Detail Type, choose Interest Paid from the dropdown menu

Step 5: Edit the account name if you need

Step 6: Choose Save and Close

Line of credit is similar to the process of bank divulging loans. It means it allows some amount of money which can be utilized as the need. QuickBooks allows entering a credit to record vendors’ returns or refunds.

There are many methods to register LOC but the best one is a journal entry. You need to find out the company and to issue some general entries. Post these, enter the details like the date of deposit. Add to it, you can also record the expenses in the future.

Tracking the Line of Credit

  • Send your credit funds into a different account
  • Register the interest changes that are most likely to appear when the credit is used up. When these charges are incurred, they need to be recorded in a committed expense account for the paid interest
  • May payment to your particular line of credit and will be able to track what you give back to the bank
  • Record the bill of expenses for using your credit to pay for the expenses of things you purchased

We hope that in this piece of content, all the important details concerning the setup of the line of credit in QuickBooks are covered and you should not have any difficulty as a user to setting up the line of credit.

Still, if you encounter any problem to perform the steps and get confused anywhere, it is highly recommended to hire the services of an expert like us.


How does the Line of Credit in QuickBooks Work?

Line of Credit is similar to the process of banks disbursing loans. It disburses a certain amount of money that can be used as and when the business needs it. It can only be used for the business and no other personal purpose.

Which two Accounts are needed to Set up the Line of Credit in QuickBooks?

In order to set up the line of credit in QuickBooks, it is imperative to create two accounts. One account is the expense account for the interest, and the second account is the principal.

How to Track the Line of Credit in QuickBooks?

Via QuickBooks Online, the payments for a credit card can be monitored and tracked. Credit card payment allows recording a highly detailed financial report to be saved. A user can do it if they wish to send credit funds into a different account.

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Deletes

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Customization

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Supported Entities/Lists

Dancing Numbers supports all QuickBooks entities that are mentioned below:-

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Receive Payment
Estimate
Credit Memo/Return Receipt
Sales Receipt
Sales Order
Statement Charge

Vendor Transactions

Bill
Bill Payment
Purchase Order
Item Receipt
Vendor Credit

Banking Transactions

Check
Journal Entry
Deposit
Transfer Funds
Bank Statement
Credit Card Statement
Credit Card Charge
Credit Card Credit

Employee Transaction / List

Time Tracking
Employee Payroll
Wage Items

Others

Inventory Adjustment
Inventory Transfer
Vehicle Mileage

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Frequently Asked Questions

 
How and What all can I Export in Dancing Numbers?

You need to click "Start" to Export data From QuickBooks Desktop using Dancing Numbers, and In the export process, you need to select the type you want to export, like lists, transactions, etc. After that, apply the filters, select the fields, and then do the export.

You can export a Chart of Accounts, Customers, Items, and all the available transactions from QuickBooks Desktop.


How can I Import in Dancing Numbers?

To use the service, you have to open both the software QuickBooks and Dancing Numbers on your system. To import the data, you have to update the Dancing Numbers file and then map the fields and import it.


How can I Delete in Dancing Numbers?

In the Delete process, select the file, lists, or transactions you want to delete, then apply the filters on the file and then click on the Delete option.


How can I import Credit Card charges into QuickBooks Desktop?

First of all, Click the Import (Start) available on the Home Screen. For selecting the file, click on "select your file," Alternatively, you can also click "Browse file" to browse and choose the desired file. You can also click on the "View sample file" to go to the Dancing Numbers sample file. Then, set up the mapping of the file column related to QuickBooks fields. To review your file data on the preview screen, just click on "next," which shows your file data.


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XLS, XLXS, etc., are supported file formats by Dancing Numbers.


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Dancing Numbers offers four varieties of plans. The most popular one is the basic plan and the Accountant basic, the Accountant pro, and Accountant Premium.


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How can I Import Price Level List into QuickBooks Desktop through Dancing Numbers?

First, click the import button on the Home Screen. Then click "Select your file" from your system. Next, set up the mapping of the file column related to the QuickBooks field. Dancing Numbers template file does this automatically; you just need to download the Dancing Number Template file.

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What are some of the features of Dancing Numbers to be used for QuickBooks Desktop?

Dancing Numbers is SaaS-based software that is easy to integrate with any QuickBooks account. With the help of this software, you can import, export, as well as erase lists and transactions from the Company files. Also, you can simplify and automate the process using Dancing Numbers which will help in saving time and increasing efficiency and productivity. Just fill in the data in the relevant fields and apply the appropriate features and it’s done.

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Why should do you change the Employee status instead of deleting them on QuickBooks?

If you are unable to see the option to terminate an employee on your list of active employees on the company payroll, this mostly implies that they have some history. Thus, if you change the employee status instead of deleting it on QuickBooks, the profile and pay records remain in your accounting database without any data loss in your tax payments.


Is it possible to use the Direct Connect option to sync bank transactions and other such details between Bank of America and QuickBooks?

Yes, absolutely. You can use the Direct Connect Option by enrolling for the Direct Connect service which will allow you access to the small business online banking option at bankofamerica.com. This feature allows you to share bills, payments, information, and much more.


Why should do you change the Employee status instead of deleting them on QuickBooks?

If you are unable to see the option to terminate an employee on your list of active employees on the company payroll, this mostly implies that they have some history. Thus, if you change the employee status instead of deleting it on QuickBooks, the profile and pay records remain in your accounting database without any data loss in your tax payments.


What are the various kinds of accounts you could access in QuickBooks?

QuickBooks allows you to access almost all types of accounts, including but not limited to savings account, checking account, credit card accounts, and money market accounts.

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Worried about losing time with an error prone software? Our error free add-on enables you to focus on your work and boost productivity.

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