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GourmetGG
Level 1

Directors Loan Repayment

Hello. I have set up a directors loan in quickbooks for the money I used to start my limited company. I have created the loan account in Chart of accounts but I am unsure how to log the repayments. I am repaying myself when I have funds available. I transfer the money back to my personal account. I have logged the repayments on the transaction page as an as a VAT free expense. Is this wrong, can anyone advise how the repayments should be logged? Thanks in advance.

Solved
Best answer April 26, 2022

Accepted Solutions
GeorgiaC
QuickBooks Team

Directors Loan Repayment

Hi GourmetGG, thanks for your post - you can record repayments by creating an expense transaction (+ New icon > expense), with the repayment account selected in the 'category' field to reduce the balance.

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3 REPLIES 3
GeorgiaC
QuickBooks Team

Directors Loan Repayment

Hi GourmetGG, thanks for your post - you can record repayments by creating an expense transaction (+ New icon > expense), with the repayment account selected in the 'category' field to reduce the balance.

paul72
Level 8

Directors Loan Repayment

It sounds like it's correct @GourmetGG 

 

The Director's Loan account is a debt owed by the company - so make sure it's a Liability account.

 

Payments from the company to yourself can be entered as an Expense or a Cheque with the Payment Account set as the company bank account & the Loan account as the Category.  The whole transaction should be NOVAT.

 

To check that the payments are moving correctly, go into Chart of Accounts.  Both the bank account & the Loan account should have decreased by the payment amount.

 

Hope this helps.

GourmetGG
Level 1

Directors Loan Repayment

Thanks for the replies. Looks like it is correct. The only part that seems wrong is i purchased a lot of items with my own money at the beginning so I have logged these items as expenses and also put them on the loan accountant. Now I am paying myself back the repayments are also showing as an expense so in theory the same money is showing as an expense twice if that makes sense?


@paul72 wrote:

It sounds like it's correct @GourmetGG 

 

The Director's Loan account is a debt owed by the company - so make sure it's a Liability account.

 

Payments from the company to yourself can be entered as an Expense or a Cheque with the Payment Account set as the company bank account & the Loan account as the Category.  The whole transaction should be NOVAT.

 

To check that the payments are moving correctly, go into Chart of Accounts.  Both the bank account & the Loan account should have decreased by the payment amount.

 

Hope this helps.


 

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