If you lend money to the company, or pay for items on behalf of the company then you will want to manage a Directors Loan account.
Setting Up
To start, set up a new Directors Loan account by going to Bank > Add a New Account. The three most important fields you should enter on the next page are:
- Account Name – this should easily identify the bank account, i.e. ‘Johns Directors Loan Account’
- Start Date – this should be a date before the first transaction. To make things easy we advise that you enter 01/01/1970 here
- Starting Balance – this should be 0.00
When you’re done, click Add Account. You’re directors loan account is now ready to use.
Recording a Loan
To record a loan from the company to the director you can do that by doing a bank transfer. This transfer represents the amount of money the company has given to you and allows you to reconcile your currency account easily. To do this go to Bank > Transfer Money Between Accounts button. Use the options here:
- Date – enter in the date that you withdrew/transferred the money from the business account to yourself
- Amount – enter in the amount withdrawn or transferred
- From – this will be the business bank account where the funds originally came from
- To – this will be your directors loan account
- Comment – to make this easy to reconcile you can enter in something like ‘Loan for Stationary′ or similar
Reimbursement
When you reimburse yourself, simply Transfer money for the Directors Loan to the Business account to set the balance ideally back to zero by going to the Bank > Transfer Money Between Accounts button. Use the options here:
- Date – enter in the date that you deposited the money back into the business account
- Amount – enter in the amount deposited or transferred
- From – this will be the directors loan account
- To – this will be your business account
- Comment – to make this easy to reconcile you can enter in something like ‘Directors Loan Repayment' or similar