Set up an Income account called available grants. During the year, simply put all grant money you receive into this Income account. Set up an Income account called unexpended grants (Income). Set up a Liability account called unexpended grants (Liability).
To record the grant: Under the Accounting tab in the left-hand navigation menu, select Chart of Accounts, then click the Add a New Account button. Quickbooks allows users to set up and categorize accounts, manage and track financial data, create a budget and produce reports.
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 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.
Should I enter a grant as an expense or revenue?
The grant is meant to pay certain expenses, but the grant is not taxable income. So I would not put it in as a income account. I plan to create a special miscellaneous expense account for the grant and enter it as a negative amount. It will show up on my P&L as a negative expense. This will make sure its not incorrectly counted as revenue .
While I was reading we ran into the inquiry “How do I record a grant as taxable income?”.
The easiest method is to record the Grant as Other Income – Economic Stimulus/Disaster Relief (or something similar). It will need to be reviewed come tax time to determine if it is declared as taxable income (see below).
Is it possible to record loan forgiveness in QuickBooks?
As for recording the loan in Quick. Books, our Development Team is currently working on an update for the program that will allow you to record the loan forgiveness correctly. You can also check out this article for more information about loan forgiveness. Feel free to comment below if you have any other questions or concerns.