Accounting for business expenses paid for from personal account

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My business is very new and before my business account was opened I paid for some purchases from my own personal funds. How do I represent this in the accounting? Do I need to create a new funding source? If so what should it be? Thanks!

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You need to record any funds owed to the Director by the company within the Directors’ Loan Account. This is a type of bank account for tracking funds owed to and from the company. You can find this account in the bank management area.

When you log the purchase on Quick File mark it as paid and select “Directors Loan Account” from the bank menu.

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A more detail explanation of the Directors Loan Account can be found in our guide: Limited Company Bookkeeping - The Basics

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Thanks for the quick response. I will have a read of the basic bookkeeping guide as recommended!

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I have read guide but not sure how to use if I regularly top up my company with personal funds. Ihave not been able to work. If I use director’s loan account it looks as if I owe company money not the other way round. Is it better to raise an invoice against the company as a ‘supplier’? Grateful for some advice please.

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Debits and credits are reversed in the context of bank accounts. It’s a weird one to get your head around but if you actually look at the ledger view of the Directors’ Loan Account it will make sense. If you transfer £1000 into your company bank account from a personal account and tag it as a transfer from the DLA in Quick File it will show on the ledger as a £1,000 credit. Any asset account in credit is actually a liability and will appear as such on the balance sheet.

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Many thanks for your quick and clear response. Much appreciated.

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