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Create payment from directors loan for an expense

Director has paid for a business expense from his personal account. I have entered the expense in the accounts as a supplier invoice but need to pay it from the director's loan account.

 

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Best answer 02-07-2019

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Established Community Backer ***

QBO does not allow you to use an asset account (directors...

QBO does not allow you to use an asset account (directors loan due in) as a payment source for a bill

the easiest way to do this is do not enter the bill, open the register for the loan due in account and make a new transaction as a decrease, select the expense account, enter something in the memo block and save

IF you have to have the bill entered, then either create a dummy bank account called clearing or use the cash account and make two entries

1. use pay bills, select the dummy bank account, and pay the bill
2. make a deposit in the dummy bank account, enter the same amount, and select the director loan account as the source (from) account for the deposit

4 REPLIES 4
Active Member

Has there been any change to this

Has there been any change to this
Established Community Backer ***

QBO does not allow you to use an asset account (directors...

QBO does not allow you to use an asset account (directors loan due in) as a payment source for a bill

the easiest way to do this is do not enter the bill, open the register for the loan due in account and make a new transaction as a decrease, select the expense account, enter something in the memo block and save

IF you have to have the bill entered, then either create a dummy bank account called clearing or use the cash account and make two entries

1. use pay bills, select the dummy bank account, and pay the bill
2. make a deposit in the dummy bank account, enter the same amount, and select the director loan account as the source (from) account for the deposit

Established Community Backer ***

You may have difficulty entering a cheque against an invo...

You may have difficulty entering a cheque against an invopice but with a different payee (director). In this situation I would skip the invoice and go directly to cheque writing (delete invoice). Cheque made out to director. 3 items on cheque.

1.expense

2.director contribution (cash in) equal to expense

3.director loan reduction equal to expense

2 will be negative, resulting in a debit, 3 will be positive (credit)

Experienced Member

Re: QBO does not allow you to use an asset account (directors...

I have followed your suggestion:

 

open the register for the loan due in account and make a new transaction as a decrease, select the expense account, enter something in the memo block and save

 

What do I then have to do to to to offset it so that it doesn't double my net assets?