Recording the grant or PPP loans as Other Income in Quickbooks Online is easy

(This is similar to Quickbooks desktop but the screens will look different).

Grants count as income, but they are not a part of your normal business. So the best way to handle them is to create an “Other Income” account and use it to categorize your income. This separates this income from your normal business activities.

Start by creating the Other Income account

Navigate to your chart of accounts by selecting accounts on the left-hand side, and choose Chart of Accounts.

That will open up the Chart of Accounts screen with the list of all of your accounts. In the top right click “new” to create a new account.

That will open the new account screen, which should look something like the screenshot below. Fill in the form with this information:

  • Account Type: choose Other Income
  • Detail Type: Other Miscellaneous Income
  • For name and description use names and descriptions that make sense for you.
  • Click on Save and Close.

When you download the transaction from the bank it will probably be from SBA Treas with some additional description behind it. Open the transaction and choose the account you created from the list.

Creating a liability account to record loans in Quickbooks Online

Navigate to your chart of accounts by selecting accounts on the left-hand side, and choose Chart of Accounts:

That will open up the Chart of Accounts screen with the list of all of your accounts. In the top right click “new” to create a new account.

That will open the new account screen, which should look something like the screenshot below. Fill in the form with this information:

  • Account Type: choose Long Term Liabilities,
  • Detail Type: choose Notes Payable
  • For name and description use names and descriptions that make sense for you.
  • Start tracking today
  • Set the balance to zero.
  • Click on Save and Close.

Back in your bank register, categorize the transaction using the account you just created: