Forum

• # 115117
• Wed 24 May 2017 11:26 AM

Can anyone check my data entry  method for the following:

This is my first client. I am new to being in practice.

I am going through cash business receipts given to me by the director and want to know how to process a reimbursement to the directors via sage 50 accounts.

There is only 1 bank account for the business.

I have directors loan accounts to use as set up by the business.

I need to CR the Directors Loan account as a liability and then pay back the director DR to show that they have been paid back what is owed to them. In other words a full record of the use of the businesses finances.

The directors loan account is £0 at the moment.

How would i process the rest to pay the Directors from the bank?

I presume I would do:

DR purchases and CR bank, as a bank payment to show what has been bought for the business.

Then  in the journal CR DLA and DR bank to contra the transaction as the money does not want to be taken twice from the bank.

Then in the journal  DR DLA and CR bank to reimburse the Director.

Can someone please give a answer that is of some help, so I am confident about dealing with the issue

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• # 115119
• Thu 25 May 2017 04:33 PM

Do the DR to the nominal code: whydontyoustopusingthecompanybankaccountasthoughitwasyourownyoumuddleheadedmugwumpandmakelifeeasierforeveryone!

On reflection that probably wouldn't quite fit on a sage TB printout so you could just set the director/s up as a supplier instead. That would also deal with any vat issues.

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• # 115120
• Thu 25 May 2017 09:42 PM

AweltedSoul said:

“

Do the DR to the nominal code: whydontyoustopusingthecompanybankaccountasthoughitwasyourownyoumuddleheadedmugwumpandmakelifeeasierforeveryone!

 

On reflection that probably wouldn't quite fit on a sage TB printout so you could just set the director/s up as a supplier instead. That would also deal with any vat issues.

”

 I've been told to use a DLA by the director. I understand what you are saying about the supplier being the director  but it is not what the director wants.

He wants full records of the reimbursement

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• # 115121
• Fri 26 May 2017 07:47 AM

What the director wants and what he gets is not necessarily the same thing.

If he asked you to put personal purchases through the business and claim the vat back would you do it 'because that is what the director wants' even though you know this is wrong?

• A clever person solves a problem.

  A wise person avoids it.

  Albert Enstein

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• # 115122
• Fri 26 May 2017 08:00 AM

MM Bookkeeping said:

“

What the director wants and what he gets is not necessarily the same thing.

If he asked you to put personal purchases through the business and claim the vat back would you do it 'because that is what the director wants' even though you know this is wrong?

”

 He's putting business purchases paid out of his own pocket in cash through the business books.

Your critisism is not helping me one bit. I asked for help in the matter in entering the details into the accounts not bite back.

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• # 115123
• Sat 27 May 2017 09:10 AM

Hi

If I understand correctly, I assume the director made purchases for the business from their own personal account?

If so, I would simplify and say:

DR: Purchases

CR: Director's Loan Account

Then

DR: Director's Loan Account

CR: Bank

This will give you the full record.

The Director is in essence a creditor / supplier.

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• # 115125
• Sat 27 May 2017 01:13 PM

jcolvin145 said:

“

Hi

If I understand correctly, I assume the director made purchases for the business from their own personal account?

If so, I would simplify and say:

DR: Purchases

CR: Director's Loan Account

 

Then

DR: Director's Loan Account

CR: Bank

 

This will give you the full record.

The Director is in essence a creditor / supplier.

”

Thank you for your input.

I was on the right track and thinking in the right way.

It's good that you can clarify this for me.

Kind regards

Kay

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• # 115155
• Tue 06 Jun 2017 08:10 AM

Colvin is correct.

Set the Director up as a Supplier/Trade Creditor.

What should happen is the Director should submit an expenses claim each time he has a batch of out-of-pocket expenses he wants reimbursing for.

You then enter the expenses claim, supported with the relevant receipts as a purchase invoice, which will:

DR Various relevant Expense Accounts in the P&L

CR The Director's Supplier in the Trade Creditors

When the Director is then physically reimbused by a payment to him from the company bank account it will be:

DR Trade Creditor

CR Bank

So you don't actually need to take it through the Directors Loan Account at all.

However, if he insists on it being posted through the DLA, then when he is reimbursed it will be:

DR Trade Creditor

CR DLA

DR DLA

CR Bank

So it will just show the amounts going in and out of the DLA.

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• # 115156
• Tue 06 Jun 2017 08:27 AM

PhilCo said:

“

Colvin is correct.

Set the Director up as a Supplier/Trade Creditor.

What should happen is the Director should submit an expenses claim each time he has a batch of out-of-pocket expenses he wants reimbursing for.

You then enter the expenses claim, supported with the relevant receipts as a purchase invoice, which will:

DR Various relevant Expense Accounts in the P&L

CR The Director's Supplier in the Trade Creditors

 

When the Director is then physically reimbused by a payment to him from the company bank account it will be:

DR Trade Creditor

CR Bank

 

So you don't actually need to take it through the Directors Loan Account at all.

However, if he insists on it being posted through the DLA, then when he is reimbursed it will be:

 

DR Trade Creditor

CR DLA

DR DLA

CR Bank

 

So it will just show the amounts going in and out of the DLA.

Thank you very much for your input philco

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