Directors Loan

[JustTel]

Extremely new to business and TAS so please forgive my naive questions!

I'm just setting up TAS now and have set 3 accounts Current, Paypal and Cash. I have money in the Current account that I paid in from my personal account, I believe this is called a 'directors loan', I have also just lent the company some more money to buy some stock.

What method do I use to show the directors loan being paid in and at a later date being paid out again? Do I need to add an account called 'Directors (loan) Account'?

[KM-Tiger]

Do I need to add an account called 'Directors (loan) Account'?

That's what I have done, and set it up as a Bank Account so you can do inter-bank transfers.

Whether that is the only or correct way I don't know, but it works for me.

[BusinessM8]

Extremely new to business and TAS so please forgive my naive questions!

I'm just setting up TAS now and have set 3 accounts Current, Paypal and Cash. I have money in the Current account that I paid in from my personal account, I believe this is called a 'directors loan', I have also just lent the company some more money to buy some stock.

What method do I use to show the directors loan being paid in and at a later date being paid out again? Do I need to add an account called 'Directors (loan) Account'?
Are you using an Accounts Package? Most simple ones and all complicated (expensive) ones will let you keep a record of such things. There's no need to set-up another bank account and pay charges, you can keep all the businesses money in its bank account and keep records (actually you have a statutory duty to do so!).

All the best

Tim

[JustTel]

KM-Tiger yeah I think thats the way my accountant showed me, thanks.

BM8 I'm only talking about a virtual 'Directors Account' on TAS which in reality will be my own personal account, just need my books to explain where that money has come from. Thats if I've understood you correctly, thanks for your input :)

[David Richards]

Yes, as KM-Tiger says, a popular way to deal with it is to create a new bank account in TAS called Director's Loan. You can then use it to record a bank transfer (for the start-up loan to the company) and also use it to record any expenses that you pay on behalf of the company from your own money.