Escrow vs Loan Accounts


when to use Escrow accounts and Loan accounts in Goldenseal accounting software.


An escrow account is for money that you manage, but that is neither an asset or a liability for you right now.

It's not yours, and you don't owe it to anyone. But you need to keep track of it on someone else's behalf.

NOTE-- You may eventually get the money, or give it to someone else. What counts is the current ownership.

1. Rental deposits
2. Client or bank money, if you are a construction manager
3. Any other money that belongs to someone else

Click here for more about escrow accounts in the reference manual.


If you are drawing construction money from an escrow account set up by a bank, title company etc, it's a LOAN account. You will owe the money when you get it.

NOTE-- Before you get the money, you don't need to manage it, so you don't need an escrow account for it-- that's the bank's problem!

Enter the account with a starting balance of 0. The balance in the account will go negative as you draw money out. Put the total amount of the loan into the minimum balance field as a negative number

Note that the unused balance of the loan does NOT show on your balance sheet, since you haven't drawn on it yet.

Click here for more about loan accounts in the reference manual.


Entered 2/7/02 by Dennis. Updated 10/23/2010.