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Record a credit you owe, and file its payments

Set up the debt with its rate and term, then split each bank payment into interest and principal.

This is for money the business owes — a bank credit, a truck loan, a mortgage, a line of credit. RunGrid does not lend anything; this is bookkeeping, which is why it lives under Accounting rather than in the sidebar.

Setting it up

Accounting → Debt & financing → Add a debt. Name it, say who lent it, and enter the amount, the annual rate, the term in months and how often you pay.

A liability account is created for it in your chart of accounts — long term when the term is over twelve months, current when it is twelve or under. That is the same rule QuickBooks applies, and it decides which half of the balance sheet the debt appears in, which is what a bank looks at.

Activating it books the money you received: your bank account goes up, the debt appears as a liability.

Filing a payment from the bank feed

When the payment shows up in Transactions, press Loan payment on that line.

1.Pick the debt.
2.The interest and principal are filled in from the amortization schedule.
3.Change them if the lender's statement says something different — their letter wins.
4.Post.

One entry: the principal comes off what you owe, the interest is recorded as an expense, and the bank line is filed. The instalment is also recorded against the debt, so the schedule stays in step.

Why the split matters

Putting the whole payment into one account is the most common mistake in small-business books, and it is wrong in both directions. As an expense it overstates your costs by the principal, and the balance sheet still shows the original debt years later. As a debt repayment it hides the interest — which is the part you can actually deduct.

QuickBooks makes you work the interest out from the lender's statement and type it every month. Here the schedule already knows it.

No debt set up yet

The panel says so and links to where to add one. If you would rather not set up a schedule at all, the ordinary Split button still lets you type the two lines by hand.

Paid off

When the balance reaches zero the debt is marked paid off. Nothing is deleted — the history stays.

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Record a credit you owe, and file its payments | RunGrid