Sage - Director Loan Account Question

[acurabusiness]

Hi

I am fairly new to Sage!

Can I use one of the Bank Accounts (1250 for example) in Sage as the directors loan account?

Could i then post an opening balance at that bank (1250) as i didn't use Sage in my first year trading but the company owed me money going into the second year.

Then when i pay the loan back to me i can show this as a transfer from main bank to the director loan account, although the real money obviously is a BACS to me. Would that work? Is this over complicating it?

Do i need to use a different nominal?

Cheers

Chris

 

[DickM]

Believe you need to set up the loan you made to the Co as a liability in your Co's balance sheet.

 

[Phil B]

Your best bet with SAGE is to open a new code under Current Liabilities and then post your opening balance there and then handle any payments through the Journal function under the Company module

Phil B

 

[David Griffiths]

Using a nominal code like 1250 for the directors loan is a perfectly valid way of dealing with the matter, particularly if the director is regularly making payments out of pocket on behalf of the company. That's quite common with smaller companies and setting the account up as a bank is far and away the easiest way to deal with this for non-accountants.

It doesn't really matter where the balance is reported within Sage. When the final accounts are drawn up then the balance can be reported in the correct place.

 

[Maslins]

Agree with David, your plan is probably best.

As a "bank account" if it is overdrawn it should be showin within current liabilities when you run a sage balance sheet anyway.

But the main thing is if it's a bank account, you can change the numbers in there without the use of journals (which is where a lot of clients make their mistakes!)

 

[TraceyAnn]

I tend to put directors loan account in loans nominal account 2300, to make sure it is shown in the B/S as a liability.

 

[HAZEL B]

Hi Chris

Have you asked your Accountant for a list of balances from your first period of trading? These will need to be set up in Sage, usually done with a journal. Make sure you don't end up with the Director's Loan account balance in twice. When you put an opening balance figure in on a new bank account Sage posts the other side of the entry to suspense account so you will need to match the entries up when posting the full trial balance.

P.m. me if you're not sure what I mean

 

[RAL]

I agree with David. It would be easier to do post if the directors make payment to supplier from personal debit/credit card. If you open DLA as nominal account, you can not post payment from nominal account to bank account.

Personally, I would open Account No 1290 as a DLA. Amend COA to take this from bank account and add to current asset with a category name Directors Loan Account. Make this account floating between current asset and current liability.

So this way it will not be within bank in COA, and if you print BS from Sage it would be in correct section of BS.

 

[weebly_one]

Hi

I am fairly new to Sage!

Can I use one of the Bank Accounts (1250 for example) in Sage as the directors loan account?

Could i then post an opening balance at that bank (1250) as i didn't use Sage in my first year trading but the company owed me money going into the second year.

Then when i pay the loan back to me i can show this as a transfer from main bank to the director loan account, although the real money obviously is a BACS to me. Would that work? Is this over complicating it?

Do i need to use a different nominal?

Cheers

Chris

I would do it exactly this way!

 

[Nick609]

I always tend to set it up as N/C 2500. Normally it will always be a liability, but obviously with Sage you can set it as a "floating account".

It is also worth speaking with your account if the balance is overdrawn (becomes a debit on your system) as there may be an issue under s419 or s160 for overdrawn directors loan accounts and benefits in kind.

Regards,

Nick Hampton
Saracens House Business Centre