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

Question asked by Denesh 3 months 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

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.

Hi

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

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