Kashflow, Director's Loan Account

[Minn Soe]

Hello,

I'm wondering whether I should create a Director's Loan account in the Kashflow Bank Area or add a transaction type called "Director's Loan" and credit/debit in the current account (default bank account in Kashflow).

At the moment the current account is in deficit (through business expenses) and respectively a transfer from the Director's Loan Account to the Current Account or credit transaction into the current account (with the "Director's Loan" transaction type) must be made so that I can show that I have financed the company from my own pocket.

Which one should I do? Is there a better way? or Does it not matter

Many thanks in advance.

 

[paultnl]

I have mine in the bank area

 

[Minn Soe]

So you use the "transfer money between your accounts" button at the bottom to credit the Current Account?

Thanks for replying

 

[paultnl]

So you use the "transfer money between your accounts" button at the bottom to credit the Current Account?

Thanks for replying

I do a monthly expenses claim in Excel then do the transfer money referencing the Excel file. That way the DL account will show the money that you have put in the business as a minus figure. Once the business is in a position to repay the loan you can get the money without any tax issues.

 

[Minn Soe]

Thanks paultnl,

Another small question, Do you credit the DL account so that it is 0 or do you leave it as a minus? i.e. Opening balance at £500, £500 lent, thus £0 balance, or Opening balance at £0, £500 lent, balance at £-500.

 

[paultnl]

my accountants told me to open it with the negative figure with the Excel sheet to hold all the details of money already given to the business.

Are you Ltd or Sole Trader? I am sure the accountants on the forum will be able to give better advice.

 

[Minn Soe]

I'm a Ltd.

 

[Jenni384]

Hello,

I'm wondering whether I should create a Director's Loan account in the Kashflow Bank Area or add a transaction type called "Director's Loan" and credit/debit in the current account (default bank account in Kashflow).

At the moment the current account is in deficit (through business expenses) and respectively a transfer from the Director's Loan Account to the Current Account or credit transaction into the current account (with the "Director's Loan" transaction type) must be made so that I can show that I have financed the company from my own pocket.

Which one should I do? Is there a better way? or Does it not matter

Many thanks in advance.

The Current account needs to show what actually happened - it needs to perfectly match your bank statement for that account. This is really important.

In KF I would set up the DLA as a separate bank account and it will record all monies you introduce to the business and all monies you take out of the business.

You would use the transfer between accounts function for actual payments from/to you to/from the Current Account.

Hope that helps.

 

[DuaneJackson]

In KashFlow, click the "Help" tab and enter "Directors Loan" into the search box.

It should bring up a document giving you detailed info on how to set it up and how to run it.