Don’t worry if you are not an accountant or you do not possess the basic knowledge of accounting and bookkeeping. It’s easy to understand the methods discussed in this article on how to record a new vehicle purchase in QuickBooks. In addition to this, we’ll also show you how to record vehicle mileage and depreciation cost of the vehicle in QuickBooks.
Related Article: Why QuickBooks Pro is the Best Choice for You?
Here, we’ll show how to set up a new vehicle in QuickBooks both as a Fixed asset and as a loan. QuickBooks provides you an option to add a vehicle in a list of your business vehicles and track expenses like billable mileage. You need to create a fixed asset account to keep track of the items. It also helps you to track and tally business health. You should know both your total miles and your business miles to accurately deduct vehicles on the tax return.
If you have any issues or you want more detail about these vehicles, you can contact our team of Intuit certified QuickBooks ProAdvisors.
Record a Vehicle Purchase in QuickBooks
If you record a vehicle then you can easily track the depreciation cost of the vehicle as well which in turn assists you in concluding a decision like whether or not to retain the vehicle in the future.
Add a New Vehicle as Fixed Asset
STEP 1: Create a Fixed Asset Account for Vehicle
- First open QuickBooks and then go to the Chart of Accounts option.
- And then select the New option.
- Then, from the categories drop-down menu, select the Fixed Asset option. If a fixed asset account is not available then select any closest account and continue.
- After that, enter a proper name and provide a description for the account. The name of the account could be Truck or Car and then you can also create a sub-account named as per vehicle model.
- In the Details Type, you need to enter the information of the newly purchased vehicle.
STEP 2: Enter the Purchased Vehicle information
- Here, if you want to track the depreciation of this vehicle then you need to select the YES otherwise NO.
- If you selected yes, then QuickBooks will automatically create a depreciation sub-account of this vehicle for you.
- Enter the amount of vehicle in the Original Cost field. (NOTE: If you are recording a loan then you can leave this field black.)
- Once you entered all the information, click on Finish.
Set Up a Vehicle/Car loan in QuickBooks
STEP 1: Create a Liability Account
- First, Open QuickBooks.
- Then, click on the Gear icon and then select the Chart of Accounts option.
- After that, select the New option at the top right corner.
- In the next window, you can either select Other Current Liabilities (1 Year) or Long Term Liabilities (More than 1 Year).
- Then, choose the Detail Type either for Other Current Liabilities or Long Term Liabilities.
- Enter an appropriate name for the account. Select a name that will help you in recognizing the vehicle loan like bank name or Car loan.
- Leave the Unpaid amount field blank. We’ll enter this in the second step.
- Review all the fields and the Save.
STEP 2: Journal Entry for Vehicle/Car Loan
- First, click on the +New button.
- Then, select the Journal Entries option.
- After that, select the liability account that you’ve just created from the account drop-down option.
- In the Credit field, enter the amount of car loan.
- After that, select the Asset account that you want to link with the loan amount.
- In the Debit field, again enter the amount of loan.
NOTE: In addition to the loan amount, you also need to enter the down payment, documents, and registration fees. Once you did that make sure credit and debit equal to zero in the journal entry.
To enter the depreciation, you need to follow the exact same steps mentioned above except choose the depreciation account instead of long term liability account.
Set Up a Vehicle List in QuickBooks
Now we start, how to add vehicles in QuickBooks step by step. Read the instruction carefully and follow them:
- First, click on the List option from the top menu bar and then select the Customer & Vendor Profile Lists option.
- After that, click on the Vehicle list.
- Now, you will see the Vehicle list Window.
- In the Vehicle List Window, click on the Vehicle drop-down menu and then click on New option.
- Now, the New Vehicle window will open.
- In the Vehicle field, enter the name of the vehicle for which you want to track mileage.
- In the Description box, you can either type the vehicle model or plate number or both.
- Then identify the vehicle according to their maker and year of manufacture.
- You may enter more identifying information if you have a fleet of cars or trucks.
- Now, click on OK to save the vehicle description.
If you click on the Reports button at the Vehicle list window, a menu will be displayed that will contain four different vehicle mileage reports as follows:
1. Mileage by Vehicle Summary
2. Mileage by Vehicle Detail
3. Mileage by Job Summary
4. Mileage by Job Detail.
Another menu of commands can also be accessed that will produce the same reports by clicking the Mileage Reports button at the top of the Enter Vehicle Mileage window.
Record and Track Vehicle Mileage in QuickBooks
- From the top menu bar click on the Company option and then select the Enter Vehicle Mileage option at the bottom.
- After that, from the Vehicle drop-down option, select the vehicle for which you want to track the mileage.
- Then, enter the trip start date and trip end date in their respective fields.
- Now, enter the mileage start and end reading in the respective fields. QuickBooks will automatically fill the total mileage field.
- If you want to create a bill for the miles then checkmark the Billable box.
- In the Customer: Job field, select the customer to whom you want to bill this mileage.
- In the Item field, you can select options like delivery, mileage, or anything like this.
- In the Notes field, you can write like what is the purpose of this trip?
- Once you entered the required information in every field then you can select the Save and Close option.
The Bottom Line
We hope this article will be proven worthwhile and helpful if you wanted to know how to record a new vehicle purchase in QuickBooks. To get instant help and best support, contact our experts on QuickBooks support phone number +1-855-441-4417. We assure that you’ll find an instant solution to any of your QuickBooks and accounting related issues.