Question asked by Mike Ashworth 8 years ago
Hiya,
I am a limited company
I have paid £500 personal cash into my business bank account to cover initial start up costs such as marketing for my new business
how do i correctly record this transation in clearbooks
note: this is not share capital.
Hi Mike
Most small Ltd companies need a Director's loan account in the books to record not only sums lent to and repaid from the company's bank account but also to record expenses paid personally by the director or salaries and dividends recorded but, as yet, unpaid.
CB makes this very easy by having a dedicated bank account to act as a director's loan account, ie in much the same way as you'd create a bank loan account.
So, unless you have already done this, head for the Bank screen and hit Add account, then hit "Add" next to "Directors loan account" and fill in the details.
From then on you can use it as you would any other bank account and so, in this case, when you come to explain the £500 coming into the bank account use the "Transfer" tab and select the Director's loan account. When you then look at the Bank screen you'll see your director's loan account in overdraft by -£500, indicating the company now owes you that money.
Best answerThankyou Paul :-)
Hi Paul, Just about to set up the DLA but have a quick question.
It's asking for "entity".
I've not come across this term using CB so far, and wondered exactly what it is and what data it is looking for in this field?
Hi Mike
Entities are the same as contacts. It is confusing in CB because it only differentiates contacts between Customers & Suppliers, without an "Other" but employees and directors tend to end up as suppliers because the Payroll and Expense claim systems create bills from you to the company to record the sums due. Similarly HMRC will also be a supplier as the system creates bills for PAYE and VAT due.
CB's guides are quite good, via the "?" top right of screen here's the one on DLAs: https://support.clearbooks.co.uk/support/solutions/articles/33000203288-setting-up-a-director-s-loan-account
Gotcha. Thankyou
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