As we know, QuickBooks offers some great functionality for handling transactions of fixed assets such as cars, machinery, buildings and so on. It even enables you to track depreciation on these assets. Tracking depreciation can help you in making decisions about whether or not to retain the asset and when to sell it. Thus keeping a record of movable and immovable assets becomes all more important. With that said, lets just check out, how to “Record a vehicle purchase in QuickBooks“. A few key points that you must know before handling transactions that include fixed assets like cars are provided below:
Fixed Assets: Assets purchased for long term use are usually called fixed assets. These assets are meant for regular use and are usually more expensive than variable assets. Examples of fixed assets are cars, machinery and land.
Depreciation: Overtime reduction in value of any fixed or variable asset is known as depreciation. Usually, we only calculate the depreciation on fixed assets as they are more expensive.
- 1 How to Record a Vehicle Purchase in QuickBooks:
- 2 How to Record a Vehicle Purchase in QuickBooks Desktop?
- 3 How to Record a Vehicle Purchase in QuickBooks Online?
- 4 How to Record a Vehicle Loan Purchase in QuickBooks?
- 5 How to Set up a New Vehicle Loan in QuickBooks Online?
- 6 FAQ’s
- 6.1 How do I record my new vehicle purchase in QuickBooks Pro?
- 6.2 Can I track my vehicle mileage in QuickBooks Desktop?
- 6.3 How to enter purchased vehicle information in QuickBooks?
- 6.4 What are the steps for setting up a vehicle list in QuickBooks?
- 6.5 What area unit the advantages of adding vehicles in QuickBooks?
How to Record a Vehicle Purchase in QuickBooks:
To properly record purchased vehicle or any other fixed asset, follow the steps provided below:
Total Time: 15 minutes
1️⃣ Creating a Fixed Asset Account for Vehicles
Creating a Fixed Asset Account for Vehicles
🔹 Go to Chart of Accounts
🔹 Click on New
🔹 Select Fixed Assets from the categories provided.
🔹 Enter the name and description for the account
🔹 Select the Detail Type
2️⃣ Adding the Purchased Vehicle
To record the purchase of the vehicle, simply record a purchase and link it to the Fixed Asset Account that you created by following the steps provided above.
🔹 Once the account has been created
🔹 You’ll have to handle depreciation and any loans and liabilities that come with this new asset.
3️⃣ Setting Up Liability Account
Setting Up Liability Account
A purchase of a fixed asset may come with associated liabilities like loans and EMI payments. To properly record the entire transaction, the user must enter and track the liability. The liability account will be a Long Term Liability Account. To set up such an account, follow these steps:
🔹 Click on the Gear Icon and select Account and Settings.
🔹 Select New.
🔹 Click on Long Term Liability from the provided options and click on Next
🔹 Enter the details for the account such as name
🔹 Click on Save
How to Record a Vehicle Purchase in QuickBooks Desktop?
- In the QuickBooks account, click on the add + icon
- Then select the check option
- Now provide all the information that is important and asked
- After that, you have to choose the option Bank or Credit Account
- In the drop-down menu of the Category option
- You have to select the Asset account in which you want to record a vehicle purchase
- Then enter the amount of the vehicle
- In the end, click on the Save and Close button.
How to Record a Vehicle Purchase in QuickBooks Online?
- First of all, open your QuickBooks online account
- Then add the item of fixed asset in your account
- Click on the List menu
- Then select the Fixed Asset Item List
- Now, you see the Item button that is at the bottom left side of the QuickBooks window; click on it
- Then click on the New option to add the new one
- A new fixed asset item box opened up and in this, you have to provide all the information about the vehicle you have purchased
- In the purchase information, you have to provide the details about the account through which it is going to connect and all other information about your vehicle
- In the section of Asset information, you have to provide the details regarding your new vehicle purchase
- After this, click on the OK button to continue.
How to Record a Vehicle Loan Purchase in QuickBooks?
- In the QuickBooks account
- Go to the + icon to create the new one
- Then click on the Check option
- You have to complete the screen of the check by providing the information of all the options that are available
- Enter the check number f you send the original check, if you pay the payment online then use the direct withdrawal or the EFT
- Then enter the EF or Debit in the field of check
- Provide the information in the Account details area of check:-
- In line 1, there is the amount of payment that is paid to the principal and the liability account for the loan
- In the line 2, the amount enter is of the interest paid and also enter the interest expense account
- In case of additional fees if any, then on the following lines; enter that and the appropriate account.
- Click on the button Save and close to save all the processes and closes this window.
How to Set up a New Vehicle Loan in QuickBooks Online?
- In your QuickBooks account
- Click on the Gear icon
- Select the Chart of Accounts
- Click on the + icon to add the new account
- Now, you have to select anyone from the options current or long-term liability
- Select the detail type of the liability (this description is given on the right side of both liabilities)
- Then click on the Next button
- Mention the name of the account (you can name it as the vehicle you purchased or on the bank name from which you took loan like ABC bank or car loan or anything that you remember)
- You have to leave the field name Unpaid Balance as blank
- At last, click on the Save button.
At this point, you should leave Unpaid Balance field blank as we’ll be handling that later and note that we are still not yet done with “how to record a vehicle purchase in QuickBooks”. Here we need to pass the loan entry.
Recording both the loan amount and depreciation will be done through simple journal entries. These entries will then be linked to particular accounts.
To Record the Loan Amount, follow the steps provided below:
- Click on the Create Button
- Select Journal Entry
- Click on the Account Drop down options and Select Liability Account
- Enter the amount for loan on the Credit side
- Select the Asset Account that you want the loan amount to be linked with
- Enter loan amount again but this time on the Debit side
You should also record every payment made for the loan. This can be done by entering checks and linking them to the loan.
To record depreciation, you can follow the same steps provided for the loan. Except this time, select Depreciation account instead of long term loan. Also, you’ll have to regularly create journal entries for keeping track of depreciation. Depreciation will have to be calculated by the user themselves.
If you are still not able to figure out “How to record a vehicle purchase in QuickBooks” then ask for QuickBooks technical support. At all times, you can turn to us for solutions regarding QB. Our QuickBooks support experts can guide you through any functionality and can also help you in setting up different accounts and recording particular entries. To know more, feel free to contact us.
How do I record my new vehicle purchase in QuickBooks Pro?
You can implement the below steps to record my new vehicle in QuickBooks Pro:
● First, select Customer and Vendor profile
● Next, select the Vehicle List
● Go to the Vehicle List window
● Click New in the menu tab
● After that, type the vehicle name in the appear text box
● Type a description of your new vehicle
● Look for the vehicle as per the manufacturing year
● After done with that, enter more details for identification
● In the end, hit Ok to save the description.
Can I track my vehicle mileage in QuickBooks Desktop?
Yes, you can easily track your vehicle mileage in QuickBooks Desktop:
● Go to the menu tab and select “Company” >> “Enter Vehicle Mileage”
● Next, choose a Vehicle that you wish to record the mileage related to
● Enter both starting as well as ending date for each mileage transaction
● Now, you have to provide a mileage reading of the vehicle (QB assist you to calculate the total mileage)
● For billing a customer, select “Billable”
● After that, open “Customer: Job” and then “Item” list
● Finally, select the mileage that you wish to bill to your customer.
How to enter purchased vehicle information in QuickBooks?
If you already have created the fixed asset account or the vehicle then perform the steps to enter the complete information of the purchase:
● If you want to track the depreciation of the vehicle then hit “Yes”
● After hitting the yes button, QuickBooks automatically creates a depreciation sub-account of the vehicle
● But you don’t want to track or record depreciation of the vehicle in QuickBooks then hit “No”
● After that, move to the “Original Cost” field and enter the vehicle amount
● Finally, click Finish once you’re done entering all the information.
What are the steps for setting up a vehicle list in QuickBooks?
● Go to the menu bar at the top and then select “List”
● Next, select the option “Customer & Vendor Lists”
● After that, click “Vehicle List”
● It will open the Vehicle List window
● Using the drop-down menu, select “New” within the same window
● Click “New Vehicle” and then give the vehicle name in the Vehicle field
● Move to the Description and enter plate or model number
● As per the manufacturer’s year and maker, detect the vehicle
● You have more vehicles then you can enter more information
● Finally, click Ok to save all the changes that are done.
What area unit the advantages of adding vehicles in QuickBooks?
Below is the mentioned few advantages of adding vehicles or recording vehicle purchase in QuickBooks:
● You will get a feature to add your worker information that helps in tracking even the traveling expenses.
● Helps in maintaining a record of each mileage of vehicle transactions
● You will get clerking feature that helps you in conniving the account balance related to the degree account
● You can track workplace Equipment by victimization “Fixed quality Item List” in QuickBooks
● You are able to update the User’s List with IRS’s mileage rates
● QuickBooks provides 4 different mileage reports such as job details, vehicle details, vehicle outline, and job outline.