basic account keeping

[zltd]

Good morning
i am just making compiling my account of all the company expenses for the company.

need some advise on the following:

1. all expenses have been paid from my personal account- are they considered as directors loan
2. do credit card purchase count as expenses ? are the monthly repayments considered as transfers?

basically i had some expenses and a few credit card purchases and no other activity

can someone advise how to record the above and in what category? for the annual accounts purposes.

 

[Scalloway]

1. Yes they are a director's loan

2. I would set up the credit card account as another loan. Put the expenses through as they are incurred.

 

[MyAccountantOnline]

I generally recommend that clients who do this set up a bank account in the records they keep called 'directors loan account' and use that to enter amounts paid on behalf of the company in your case the expenses paid on your credit card and the receipts in your case the credit card repayments, but it will depend on what system you are using for your bookkeeping.

 

[zltd]

thanks
I'm using a free app.
have created a director loan loan account for all the expenses and credit card has its own account
so they would be both classified as liabilities right?

 

[zltd]

Also how would i classify the credit card payments ? initially from business account and then personal account/

bills or expenses or ?

 

[MyAccountantOnline]

thanks
I'm using a free app.
have created a director loan loan account for all the expenses and credit card has its own account
so they would be both classified as liabilities right?

No the credit card isnt a company liability - it's yours. It shouldnt appear in the company accounts.

The debt the company has is to you for the amounts you've paid on it's behalf on your credit card.

 

[MyAccountantOnline]

Also how would i classify the credit card payments ? initially from business account and then personal account/

bills or expenses or ?

When the company repays the amounts you've paid it will reduce the directors loan account balance.

 

[zltd]

No the credit card isnt a company liability - it's yours. It shouldnt appear in the company accounts.

The debt the company has is to you for the amounts you've paid on it's behalf on your credit card.

its a commercial credit card under company name

 

[MyAccountantOnline]

its a commercial credit card under company name

Ahh sorry I misunderstood I thought it was your private credit card.

If its a company credit card it will indeed show as a company liability on the balance sheet.

I'd still generally suggest setting it up in your company accounting records as a bank account so that you can easily enter the payments and receipts on the account.

 

[zltd]

you mean credit and debit ? and how can i use it for companies house?

 

[MyAccountantOnline]

The amount owing to the credit card company by the company will be a credit balance.

I dont know what app you have but very few accounts packages (apart from the ones accountants such as myself use) will prepare accounts for Companies House.

 

[Jeremiah@RHJ Accountants]

But you can do all the bookkeeping and handover to an accountant to prepare the year end accounts and corporation tax returns.

which for most companies i would strongly advise, as there are many things you may be missing out on in terms of tax efficiency.

 

[zltd]

Great thanks
There has not been a lot of activity really. just few payments here and there.

The app gives me reports such as balance sheet and P&L and etc
is this not sufficient for companies house?

 

[MyAccountantOnline]

....
The app gives me reports such as balance sheet and P&L and etc
is this not sufficient for companies house?

I'd be very surprised if it is.

 

[Jeremiah@RHJ Accountants]

Read this for requirements for companies house

http://www.companieshouse.gov.uk/infoAndGuide/faq/accountsAndReports.shtml

 

[zltd]

Thank you all for the info and the advise