Entering a vehicle purchase into QuickBooks

Lynda's dream car

Lynda's dream car

Do you need to enter a new vehicle purchase into Quickbooks?  And where did the truck go (from my original posting of this)? Well, it changed to my dream car! All kidding aside, when you add a vehicle to QuickBooks, how do you enter this transaction accurately for your business records? So many questions need to be answered first. Let's face it, when do you find out a client has purchased a vehicle? Usually when the transaction pops up in the bank feed. Then it is too late to provide the client with some valid advice. Some concrete questions to ask:

  • Who owns the vehicle?  The business or the business owner?
  • Is there a loan?  

Entering a vehicle purchase:  Set up the asset..

Set up the asset..

  • Gear Icon > Chart of Accounts.
  • On the top right click New.
  • Under the category type select either Fixed Asset.
  • Select the detail type of asset (if none pertain select the closest and proceed) and then click Next.
  • Name the account.  You can call it Trucks.  Some CPA's like a parent account Truck and then sub accounts, like GMAC 2017 and so on.
  • For the question: Do you want to track the depreciation of this asset?, click Yes or No. (If Yes is selected the system will automatically create a Depreciation sub account for the item).
  • Fill in the original cost fields. (If recording the loan, please leave this blank.)
  • Click Finish and you are done!

Entering a vehicle purchase:  Set up the loan...

Set up the loan...

  • Gear Icon > Chart of Accounts.
  • On the top right click New.
  • Select either Other Current Liabilities (1 yr note) or Long-term Liability (more than one year note)
  • Choose the detail type of Other Current liability or Long-term liability (a description is listed to the right of each option) and click Next.
  • Name the account.  You can name it Truck loan or N/P Chase Bank or something that will help your recognize which loan it is.
  • Leave the Unpaid Balance blank.
  • Click Save.

The Journal entry...

Last piece of advice: When in doubt, contact your accounting professional

Last piece of advice: 

If this whole transaction just seems like too much to handle seek our your accounting professional for guidance.  You want your records to be correct.  A quick phone call or email is much better than guessing how to enter it and getting it incorrectly.

I hope this video helps those of you that want to tackle this transaction on your own.  There is so much more I could tell you about when it comes to entering auto/vehicle expenses. Remember, if the vehicle is used for personal use (which is 99% of the time, in my experience), there will be some tax implications that you will need to address.  You will need to adjust these expenses by the percentage of the usage that was personal.  

If you have any questions or would like to see a future video on another topic, please reach out to me on Facebook.

Lynda Artesani

Lynda Artesani is the president of Artesani Bookkeeping where she uses her expertise and organizational skills to help her clients thrive and become profitable. Lynda is a member of the Intuit Trainer Writer Network. She is an alumni member of the Intuit Advisory Board. Additionally, she is the first Expert Columnist for the QB Community forum. She is also a co-founder in a Facebook group called QB Community Live!