Bookkeeping Tips • October 27, 2026 • by Zachariah Smiley
Here's a quiet error hiding in a lot of books: the entire loan payment categorized as one expense. It looks tidy, and it's wrong — a loan payment is two different things wearing one coat.
Only the interest portion is an expense. The principal portion reduces what you owe — it belongs against the loan liability on your balance sheet, not on your Profit & Loss. Book the whole payment as an expense and you overstate costs and carry a loan balance that never shrinks.
The tell is easy to check: if your loan balance in QuickBooks hasn't moved in months, the split is missing. Fixing it is core cleanup work — and it makes both your profit and your debt picture honest at the same time.
This is exactly the kind of thing I clean up and keep clean for Wichita small businesses — catch-up projects and monthly bookkeeping, quoted flat after a free look at your books.