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M
martyneco
December 30, 2020
Question

My business owes me money, how to do i record the payments?

  • December 30, 2020
  • 1 reply
  • 0 views

My business owes me money, i have taken some of this money and recorded the payments into retained earnings account.

 

A director loan account has been set up by my accountant on her quickbooks software and the money owed is recorded there, she will merge her records with mine soon. I started doing my own book keeping the start of this year so I don't have the account with the money owed to me on my quick books.

 

My question is how do i record the payments i have taken, until my accountant can merge our records. 

 

Is the money owed to me an expense and as such should it appear on my profit and loss statement? Because at the moment it is not appearing, so my profit appears higher.

1 reply

S
ShopAdmin
March 15, 2021

Create a new account (Accounting > Chart of Accounts > New see attached pic) called Directors Loan Account and make sure it is Current Liability  balance sheet account.  Make sure you set the date as the start of your account year and leave the VAT as blank as these transactions are outside the scope of VAT

 

Post your transactions there and they will appear correctly on the Balance Sheet and your accountant can easily identify these and account for them when they do your annual accounts. 

 

They should not appear on the P&L account

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