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Manigun
January 29, 2025
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Director's loan to pay for an invoice

  • January 29, 2025
  • 1 reply
  • 0 views

Hi,

 

I realise this has been answered multiple times but I still don't understand how to do this.

 

When I started my business there were several bills that needed to be paid before the company had any money in the bank.

 

I paid for these from my personal funds and created a bill for each of them in QuickBooks.

 

I'd now like to record a director's loan in quickbooks to track the money I gave the company - so I can get paid back in the future.

 

I'd also like to "pay" these bills with the money from the director's loan - so they can be included in the company's vat return and end of year accounts.

 

Any advice I've found here just helps with the first part. This KB article seems the easiest way to record the loan - https://quickbooks.intuit.com/learn-support/en-uk/help-article/supplier-loans/record-director-loan-quickbooks-online/L4xmQTWCA_GB_en_GB

Best answer by

You can set up the director's loan account first in the Chart of Accounts to pay the company’s bills, Manigun. I'll elaborate on it in detail.

 

The Director’s Loan Account refers to a specific account that tracks the money lent to or borrowed from a company by a director (or shareholder) of that company.

 

To set up the director's loan account you can follow these steps:

 

  1. Sign in to your QuickBooks Online account.
  2. Go to the Gear icon and select Chart of accounts.
  3. Select the New button then complete the following fields:
    • Account Type: Non-current liabilities
    • Detail Type: Shareholder Notes Payable
    • Name: [Director's name] Loan Account
    • Description: This is optional but helpful in tracking the account's purpose
  4. In the Unpaid balance field, enter the amount owed to the director. Ensure to set the correct date of when the amount was owed.
  5. Once done click on Save and Close.

 

To pay the bill, here's how:

 

Create a Journal entry

 

  1. Click on +New and select Journal entry.
  2. Under the Account column, select the accounts payable where the payment will come from and the director's loan account where the payment should go to.
  3. Under the Debits column select the accounts payable.
  4. Under the Credits column select the director's loan that you set up.
  5. Once done click on Save and close.

 

 

The next step is to go to Pay Bills to link the Journal Entry (JE) that you've made with the open bills.

 

 

Moreover, once the money is reimbursed to your account in the future, you can follow Step 2 of this article to guide you through the process of recording a director's loan in QuickBooks Online: Record a director's loan in QuickBooks Online.

 

I'm still here if you need any more help with handling bills. Just post another question or comment back, and looking forward to supporting you.

1 reply

A
Anonymous
Answer
January 29, 2025

You can set up the director's loan account first in the Chart of Accounts to pay the company’s bills, Manigun. I'll elaborate on it in detail.

 

The Director’s Loan Account refers to a specific account that tracks the money lent to or borrowed from a company by a director (or shareholder) of that company.

 

To set up the director's loan account you can follow these steps:

 

  1. Sign in to your QuickBooks Online account.
  2. Go to the Gear icon and select Chart of accounts.
  3. Select the New button then complete the following fields:
    • Account Type: Non-current liabilities
    • Detail Type: Shareholder Notes Payable
    • Name: [Director's name] Loan Account
    • Description: This is optional but helpful in tracking the account's purpose
  4. In the Unpaid balance field, enter the amount owed to the director. Ensure to set the correct date of when the amount was owed.
  5. Once done click on Save and Close.

 

To pay the bill, here's how:

 

Create a Journal entry

 

  1. Click on +New and select Journal entry.
  2. Under the Account column, select the accounts payable where the payment will come from and the director's loan account where the payment should go to.
  3. Under the Debits column select the accounts payable.
  4. Under the Credits column select the director's loan that you set up.
  5. Once done click on Save and close.

 

 

The next step is to go to Pay Bills to link the Journal Entry (JE) that you've made with the open bills.

 

 

Moreover, once the money is reimbursed to your account in the future, you can follow Step 2 of this article to guide you through the process of recording a director's loan in QuickBooks Online: Record a director's loan in QuickBooks Online.

 

I'm still here if you need any more help with handling bills. Just post another question or comment back, and looking forward to supporting you.

    M
    ManigunAuthor
    January 30, 2025
    Thanks a million!

    You're a lifesaver 😁

    This clears it all up
    JenoP
    JenoP
    January 30, 2025

    You're very welcome, Manigun!

     

    The Community and the entire QuickBooks Team are always delighted to provide help.

     

    Should you need any additional assistance, please don't hesitate to return with more questions or create a new thread in our forum. We're here to help!

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