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AndyA60
October 26, 2022
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Directors Loan tranactions

  • October 26, 2022
  • 1 reply
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Hi

I have a Sole Trader Company and a newly formed Ltd Company which both use QBO with separate accounts. I have transferred funds from the Sole Trader business' bank account to the Ltd business' bank account for initial funds.

In the Sole Trader accounts the money has been entered as "Drawings" which is fine. However for the Ltd company, my accountant, has recommended that the money should be classed as a "Directors Loan".

I have set up a new account called "XXX Directors Loan" in my Ltd company Chart of Accounts and can see the funds in my imported bank transactions. How do I process the bank transaction in QBO so that it enters the correct account? 

Best answer by TirzahC

Hi, AndyA60.

 

Generally, if it is a director's loan to the business it is set up as a liability as it is money loaned to the business.

 

Let's record the transaction of your LTD company money we got from the loan and then its payment. Let me walk you through the steps:

 

  1. Select + New and then Journal entry.
  2. Under the Account column, add the company’s bank account where the payment will come from, and the director’s loan account where the payment should go to.
  3. Under the Credits column and in the same row as the bank account, enter the amount of payment.
  4. Under the Debits column and in the same row as the director’s loan account, enter the same amount as the payment.
  5. Add a description and/or memo such as loan payment—for tracking purposes.
  6. Select Save and close.

 

We can also read through this article: Record a director's loan in QuickBooks Online. 

 

I'd also suggest we speak with our accountant for the proper posting of your transactions. 

 

Once done with the set-up, let's match the imported transactions to the existing account so it will post to the correct accounts. Here's how: 

 

  1. Click Banking in the left panel and choose Banking.
  2. In the For Review tab, select the imported transactions.
  3. Click Find a match and then Save. 

 

I've included these articles that may help us with the process: 

 

 

Feel free to message us again if we have follow-up questions. We can always count on us here in the Community at any time. Have a great day ahead. 

1 reply

T
TirzahCAnswer
October 26, 2022

Hi, AndyA60.

 

Generally, if it is a director's loan to the business it is set up as a liability as it is money loaned to the business.

 

Let's record the transaction of your LTD company money we got from the loan and then its payment. Let me walk you through the steps:

 

  1. Select + New and then Journal entry.
  2. Under the Account column, add the company’s bank account where the payment will come from, and the director’s loan account where the payment should go to.
  3. Under the Credits column and in the same row as the bank account, enter the amount of payment.
  4. Under the Debits column and in the same row as the director’s loan account, enter the same amount as the payment.
  5. Add a description and/or memo such as loan payment—for tracking purposes.
  6. Select Save and close.

 

We can also read through this article: Record a director's loan in QuickBooks Online. 

 

I'd also suggest we speak with our accountant for the proper posting of your transactions. 

 

Once done with the set-up, let's match the imported transactions to the existing account so it will post to the correct accounts. Here's how: 

 

  1. Click Banking in the left panel and choose Banking.
  2. In the For Review tab, select the imported transactions.
  3. Click Find a match and then Save. 

 

I've included these articles that may help us with the process: 

 

 

Feel free to message us again if we have follow-up questions. We can always count on us here in the Community at any time. Have a great day ahead. 

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