How can you pay off your DL with a dividend....

Question asked by Denesh 3 years ago

Hello

I have a director loan paid to myself.
Soon, I will want to pay out my dividends by creating a journal etc... Instead of physically transferring the dividends from the business bank account to myself, I would like to pay off the director's loan account using the dividend. Otherwise, I would have to manually transfer the amount to my personal bank, explain the payment as 'my dividends' then I would have to transfer from my personal bank account and explain the payment again into my DL account.

Thanks

dividends
directors
loan
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3 Replies

Hi Danesh,

You should be able to do this via the dividends tools normal, but make the payment of the dividend to a contra account and then transfer that to the DLA. This would allow you to clear down the DL and also record the dividend payment.

All the best,

Mohamed.

Best answer
3 years ago

Hi

Thanks. But what’s a contra? How do I make one?

3 years ago

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