How do you record a directors loan (money given to the company)? It is showing up as sales

Hi there, @info-loughwellfa. I have all the steps on how to record a director's loan.

To start tracking loans, we'll have to set up a liability and expense account for the loan and interest payments, respectively. Here’s how to set up a liability account for your loan:

1. Go to the Gear icon and select Chart of Accounts.
2. Select New to create a new account.
3. From the Account Type dropdown, select Non-Current Liabilities. If you plan to pay off the loan by the end of the current financial year, select Current Liabilities instead.
4. From the Detail Type dropdown, select Notes Payable or Loan Payable.
5. Give the account a relevant name.
6. Choose when you want to start tracking your finances. In the Balance field, enter the amount in the account, and determine the as of date. Enter today's date if you want to start tracking immediately.
7. Select Save and close.

Then, follow these steps to create an expense account:

1. Go to the Gear icon and select Chart of Accounts.
2. Select New to create a new account.
3. From the Account Type dropdown, select Expenses.
4. From the Detail Type dropdown, select Interest Paid.
5. Enter the account name for the interest payments.
6. Select Save and close.

After that, you can record the money you got from the loan. Follow these steps:

1. Select + New.
2. Select Journal entry.
3. On the first line, select the liability account you just created from the Account dropdown. Enter the loan amount in the Credits column.
4. On the second line, select the appropriate bank account from the Account dropdown. Enter the same loan amount in the Debits column.

When it's time to repay the money, check out this article and proceed to Step 3: Set up a loan.

I'm also adding these links that might be helpful for you in case you pay for business expenditures from a personal bank account:

• Mixing business and personal funds
• Pay for business expenses with personal funds.

Don't hesitate to visit us again should you require further assistance setting up a loan. The Community is always here to help.