So, you have purchased a new vehicle for your business and you are looking to set up the vehicle in the QuickBooks online, your accounting software application. Well, there are a few aspects that need to be taken care of while setting up your new vehicle in the QuickBooks online like who is the owner of the vehicle i.e. business or the owner of the business. How is the vehicle financed i.e. if it is self-financed or a loan has been taken to purchase the vehicle?
Steps for Setting up a New Vehicle in QuickBooks Online
After a little insight over the factors to be considered when setting up a new vehicle in QuickBooks online, let us now look into the stepwise process for completing the same:
Step 1. First of all, search for the gear icon for settings on QuickBooks online screen after logging in. Click on settings (gear icon) and then a chart of accounts.
Step 2. Now in the next step, on the top right, you need to click on New and select the fixed asset you want to set up under the category type.
Step 3. Now in step 3, choose all the details relating to the type of asset (if you cannot find the exact details, choose the closest ones) and click on Next to proceed.
Step 4. Now enter the name of the account like car, truck. You can also enter the specific vehicle model under the subaccount name.
Step 5. Further in this step, select whether you want to track the depreciation of the asset. You will have click on ‘Yes’ or ‘No’. If you select the Yes box, the system will automatically create the depreciation subaccount for your vehicle in QuickBooks Online.
Step 6. Now in this step, you need to enter the original cost of the vehicle. You can leave this column blank in case the vehicle is financed through a loan i.e. you have taken the loan and will record the loan for a vehicle in the QuickBooks.
Step 7. In the last step, click on the Finish to complete the process.
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In case you purchased the vehicle by getting it financed through the bank loan, then you need to follow the below steps to set up the loan:
Step 1. At the initial step, you need to click on settings (gear icon) and then click on the chart of accounts.
Step 2. Now in the next step click on New in the top right corner.
Step 3. After the above step, you need to click on and choose either current liabilities (if you are planning to pay off the loan within a year) or long-term liability (if you are planning to keep the loan for more than a year). After that, you need to click on next.
Step 4. Now you need to enter the name of the account like a Car loan, Truck loan, etc.
Step 5. In this step, leave the unpaid balance as blank and click on save and close.