Directors Loan Repayment

GourmetGG · ‎April 26, 2022

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.

GeorgiaC · ‎April 26, 2022

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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GeorgiaC · ‎April 26, 2022

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 · ‎April 26, 2022

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 · ‎April 26, 2022

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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Directors Loan Repayment