Settling Director Loan Accounts on Sage

Innovativo · Jan 4, 2010

Hi,
I've set up a director loan account (DLA) on Sage Instant Accounts v15 (with a nominal code of 1252). I've now recorded all transactions where I used my own personal funds during the start up phase of the business (company formation costs, business card printing, laptop that kind of thing), prior to getting the business bank account sorted - don't ask - it took ages!

The DLA is now a liability against my business and shows up as such on the balance sheet. Good... However, I now want to pay back the directors loan (to myself) from the business funds in the Business Current Account (nominal code 1200).

My question is, once I've made the physical transaction of the owed funds from my business bank account to my personal account (which I'll do using BACS), how do I correctly record this on Sage?

Previous advice I found on this forum suggested I just make a transfer transaction from my business bank account (1200) to my DLA account (1250) thereby making the balance of my DLA account nil. Does it matter that this isn't a "payment" transaction from 1200 and is this OK in terms of reconciliation between my physical business bank account and my Sage bank account in the nominal ledger?

I think its the double entry aspect I'm trying to get my head around. A liability will be zeroed and a debit entered in my ledger - that's right isn't it?!

Thanks in advance

Simon

johndon68 · Jan 4, 2010

Yes, you would do a transfer between 1200 code and the DLA bank code.

This does a double entry as follows:

CR Bank Account
DR Directors Loan Account

John

larabelle · Apr 12, 2010

I ahve a similar issue, would you then need to do an expenses account dr and then cr the directors loan acc.

My partner started a new business last year but wont start trading until this year so he has paid for stationary etc our of his own personal account and bit confused how to add this all to sage and record him taking the repayments. Do you need a sepete VAT account as well

stan_cns · Jun 30, 2014

hello, please can anyone help in the house
i have a similar issue as those above,about to start my accounting year but have made several expenses with my personal cash how do i bring this expenses into sage and pay back myself when the business kicks off good

johndon68 · Jun 30, 2014

Create a new bank account in Sage called Directors Loan and pay the expenses from that account. As and when the loan is repaid, you'd do a transfer from the bank current account to the loan account.

John

stan_cns · Jun 30, 2014

thank johndon68 but will the expenses be recorded in the accounting year?because they were made before the start of business
And i also bought some raw materials, and fixed assets, how do i treat them

Scalloway · Jun 30, 2014

If this is your first year of trading you should take the expenses into Sage on the date the business started.

UK Contractor Accountant · Jul 1, 2014

The qualifying pre-trading expenditure should be treated as incurred on the day on which the trade is first carried on (ICTA88/S401 (1)). It therefore enters into the calculation of the trading profit or loss for accounting period on which the trade starts.

stan_cns · Jul 2, 2014

thanks so much.
Another question if i purchase fixed asset,what is the posting steps in sage. i.e from bank to the fixed asset register

johndon68 · Jul 2, 2014

You'd post a bank payment (or supplier payment if an invoice was raised) to the relevant fixed asset nominal code.

Assuming you then want Sage to automatically work out the depreciation, you set it up in Fixed Assets and, at the end of every month, run the Month End procedure which will post the depreciation journals.

John

Search

Search

Settling Director Loan Accounts on Sage

Innovativo

johndon68

larabelle

stan_cns

johndon68

stan_cns

Scalloway

UK Contractor Accountant

stan_cns

johndon68

Similar threads

Latest Articles