Understand exactly what you are saying, but this business has always had a vendors payable and this method of recording sales has never been an issue until the square loan was incurred. I have several "market" clients like this one, and it works out fine for all of them. In this situation, the daily square payment that is deposited into the bank account is net the amount of sales less the loan payment. The bank balance reconciles each month. I wonder if I could Dr Cash for the gross sales (instead of the net amount that comes through square) and Cr vendor sales and then Dr the liability and Cr cash for the amount of the loan payment each month?