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QuickBooks CPA discusses the Loan Manager Feature | Wilmington NC

QuickBooks CPA Wilmington NC

Gary Bode, CPA: we try to make QuickBooks managerially useful. For a free phone consult, call 399-2705.

QuickBooks bookkeeping, for recurring loan payments, used to be irritating because of;

  • The nature of loan payments themselves. Although the payment remains the same, the split between principal and interest changes with every payment.
  • The accounting treatment for loan payments. Interest is an Income Statement item, while principal is a Balance Sheet item.
  • While you could set up a memorized, split and recurring payment, the amounts had to be individually tweaked.
  • A loan amortization schedule had to kept external to QuickBooks.
  • Timing discrepancies made the loan amortization schedule less accurate.

Do you really want to use Loan Manager?

Perhaps not. Accounting data can and should be used for managerial purposes. A good QuickBooks CPA adjusts their own perspective to whatever helps the client. Sure, technically, the loan payment is split between the Income Statement and the Balance Sheet. But many small business owners think in terms of cash flow. So I’ll set up the Income Statement to reflect true cash flow, making it a great budgeting tool and cash flow manager. Even though it’s temporarily incorrect. Year end adjustments return the books to IRS and accounting compliance. 
– Gary Bode, QuickBooks CPA in Wilmington NC

QuickBooks Loan Manager

The Loan Manager feature, found under the Banking tab, calculates a loan amortization schedule based on the length of term, interest rate, balloon payment, etc. QuickBooks then automatically produces a timely check each period, complete with the proper amount and split. Loan Manager makes the bookkeeping easier, faster and more accurate.

Limits of Loan Manager

Folks don’t always pay on time. Or pay early. Some late payments include a lender defined amount of interest, which helps keep the amortization schedule intact. But any QuickBooks CPA knows a year-end adjustment is still required, even with Loan Manager.

Your QuickBooks CPA makes difference in how useful the program is to your company. What’s the point in having a powerful and flexible tool if it isn’t tweaked to your mindset and company’s needs? We’re a Wilmington NC QuickBooks CPA firm serving a wide geographic base through our Virtual Office. So, if you like what you’re reading, and don’t have local QuickBooks expert, give us a call for a free phone consult at (910) 399-2705.

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