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Set up line of credit or equity accounts for online banking in QuickBooks

You want to set up a line of credit or equity account for online banking in QuickBooks.

Why this is happening

Acceptable businesses have a revolving line of credit (RLOC) with their bank. You can easily set up an RLOC in QuickBooks.

The first step is to set up an RLOC account. This account can be of type credit card, other current liability or long term liability. Do not make it an accounts payable account. If you are unsure which type you want, consult your accounting professional.

Assuming it is GAAP-acceptable for your business entity, configure the account in QuickBooks as a credit card account.  This gives it the option for online banking with most financial institutions.

How to fix it

You can set up a new account to track your RLOC. Make sure to consider which type of account to use and then see setting up a new account.

  • To draw on the RLOC (example: borrow money from the bank) - enter a deposit using the RLOC account as the From Account.
  • To pay down the RLOC (example, to pay back the bank) - enter a check to the bank using the RLOC Account as the offset.
  • If interest charges are added to the RLOC - enter them via journal entry.

If you don't want to use a bank account to do this, try these steps:

KB ID# INF13289
4/30/2017 2:03:51 AM
QYPPRDQBKSWS07 9138 Pro 2017 127949