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How to record a Directors Loan repayment?

Question asked by Laura Harrington 5 years ago

Hi there,

Wondering if someone can help...am I correct in thinking that in order to record a Directors loan repayment I need to set the Directors loan account up as a supplier and record a purchase? and then reconcile through the Yodlee import?

Many thanks in advance Laura

13 Replies

Thanks.

Something is odd then.

My Clearbooks was set up by a bookeeper, and I see a director's loan in the Balance sheet (Account code 850303), but there is no DL bank account set up.

This payment was paid (by me personally) into the company's main current account and explained as being to that Director Loan 850303 account code.

So is this wrong and if so how should I correct it now?

Thanks

Hi Pete,

I've taken a look at the account, it seems as though your bookkeeper has set this account code up manually, but has no transactions posted to it. In this case, I would suggest creating a Director's Loan Account through Money > Bank Accounts > Add Account.

Tommy

There is a transaction, REC000005 5 April 2016.

yes I can create the Bank account, but two years later how do I show the £19,533.06 being in there?

Hi Pete,

The transaction you've mentioned is currently not coded to a Director's Loan account. In this case, if this is the amount in the account at the start of your accounting period, you can then proceed to add an opening balance to the DLA. To do so, head to Dashboad > Opening Balances > Cash,

Tommy

I'm confused now. If you look at that Invoice, it says Account: Director loan.

Hi Pete,

I've taken a look at REC000005 and the invoice indicates a Royalties account code.

Tommy

I think you are looking at the wrong company it's Cafesaxophone Ltd.

Hi Pete,

Ah, my apologies, I have been looking at your other account. In this case, I would suggest, voiding the REC, creating a Director's Loan bank account and perform a transfer from the DLA to your business account if you are lending to the company. Likewise, you will process a transfer from your business account to the DLA if you are repaying the Director.

Tommy

But wouldn't that mean there is too much showing in the bank account? And the transfer took place two years ago, so is already recorded in the balance sheet for the year 2016/17

Hi Pete,

No, by removing the REC, this will reduce your bank balance by the invoice amount. Likewise, when you recreate the DLA account and process the transfer for the year 2016/17, this will increase your business bank account by the same amount.

Tommy

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