Don’t be concerned. If you are not an accountant or if you lack basic accounting and bookkeeping skills. The methods for documenting a new vehicle purchase in QuickBooks discussed in this article are simple to comprehend. We’ll even show you how to enter vehicle mileage and depreciation costs in QuickBooks.
We’ll show you how to set up a new vehicle in this section. Both as a fixed asset and as a loan in QuickBooks. You can add a car to your QuickBooks account. Add your company vehicles to a list and keep track of expenses, including billable mileage.
To keep track of the things, you’ll need to build a fixed asset account. It also aids in the tracking and tally of your company’s fitness. To correctly subtract vehicles on your tax return, you should know your total miles and business miles. You can contact our Intuit team-trained QuickBooks ProAdvisors if you have any questions or want more information about these vehicles.
How to Record A Vehicle Purchase In QuickBooks
If you register a car, you can easily monitor its depreciation expense, which can help you decide whether or not to keep the vehicle in the future.
Add a New Vehicle as Fixed Asset
STEP 1: Make a Vehicle Fixed Asset Account:
- Open QuickBooks first, then select Chart of Accounts from the drop-down menu. Then choose the New alternative.
- Then, from the drop-down menu of categories, choose Fixed Asset. If a fixed asset account isn’t open, select the following nearest account and proceed.
- After that, give the account a proper name and a brief description. The account’s name may be Truck or Car, and you can then build a sub-account for each vehicle model.
- You must fill out the information for the newly purchased vehicle in the Details Type.
STEP 2: Fill in the details about the vehicle you just bought:
- If you want to keep track of this car’s depreciation, select YES; otherwise, select NO.
- If you want yes, QuickBooks will create a depreciation sub-account for this vehicle automatically.
- In the Original Cost area, enter the vehicle’s cost. (NOTE: If you’re documenting a loan, this field should be left blank.)
- When you’ve finished entering all of the detail, click Finish.
Create a vehicle/car loan in QuickBooks
STEP 1: Creating a Liability Account entails the following steps:
- Open QuickBooks first.
- Next, pick the Chart of Accounts choice by clicking on the Gear icon.
- Then, in the top right corner, pick the New alternative.
- Select Other Current Liabilities (I Year) or Long Term Liabilities in the next slot (More than 1 Year).
- Next, choose either Other Current Liabilities or Long Term Liabilities as of the Detail Kind.
- Give the account a name that is fitting. Choose a name for the vehicle loan to help you remember it, such as bank name or Car loan.
- Fill in the Unpaid Number area with a zero. Then we’ll move on to the next level.
- Go through all of the fields and click Save.
STEP 2: Make a vehicle/car loan journal entry:
- To begin, click the new button.
- Next, choose Journal Entries from the drop-down menu.
- Then, from the account drop-down menu, choose the liability account you just built.
- Fill in the balance of the car loan in the Credit sector.
- Next, choose the Asset account that will be linked to the loan number.
- In the Debit sector, enter the loan sum once more.
Please note that you must also enter the down payment, paperwork, and registration fees in addition to the loan sum. If you’ve done so, double-check that the credit and debit balances in the journal entry are both nils.
To enter depreciation, repeat the steps above but choose the depreciation account instead of the long-term liability account.
Create a vehicle list in QuickBooks
Now we’ll go over how to connect vehicles to QuickBooks in a step-by-step manner. Read and follow the instructions carefully:
- To get started, go to the top menu bar and select List, then Customer & Vendor Profile.
- Next, select Vehicles from the drop-down menu.
- The Vehicle List Window will now appear.
- In the Vehicle List Window, select Vehicle from the drop-down menu, then tap on New.
- The Vehicle List Window will now appear. • In the Vehicle List Window, select Vehicle from the drop-down menu, then select New.
- The doors for the New Vehicle will now open.
- Type the name of the vehicle you want to log mileage for in the Vehicle area.
- You can type the vehicle model, plate number, or both in the Description sector.
- Then, according to the vehicle’s manufacturer and year of production, mark it.
- If you have a fleet of cars or vans, you can enter more identifying details.
- To save the vehicle summary, click OK.
When you click the Reports button in the Vehicle list window, a menu will appear with four separate vehicle mileage reports, as shown below:
- Summary of Mileage by Vehicle
- Vehicle Detail Mileage
- Job Summary Mileage
- Mileage broke down by job detail.
To summarise, QuickBooks Desktop software is a one-stop solution for managing the books and accounts of an organisation. This blog’s whole idea is to help you understand how you can record a vehicle purchase in QuickBooks Desktop software.