Cross company deferred loan

I have two companies that i need to set up a loan between.
(Company A) has a cash pot supplied by a director (directors loan account) that is allocated to provide a start up company(company B) with cash flow (money released over 18 month period as and when Company A requests additional funding help up to £25000 Max loan) No repayments are due until after the first 18 month period, after which repayments will begin. the total loan value is unknown until the 18 month period is up when the current balance will be used as the loan amount to calculate repayments.

How do i set up the two quickfile accounts to show the correct transactions between the two companies and their respective loan accounts.
obviously company A will receive no income on this loan until 18 months have passed how will this be shown on the company returns?

I would appreciate any help in this matter asap please.

Hi @dcgcorp

Unfortunately, there’s no way to directly link the bank accounts of two different companies together for them to keep in sync with each other - you would have to treat them separately.

In terms of setting up the loan on QuickFile and management payments etc., take a look at @Glenn’s post here:

However, as you’re dealing with a loan between two of your companies, it may be better to speak to your accountant to ensure it’s set up correctly for both accounts.

I have set up the loan account for the start up company in (Company A) bank account and a loan account in (company B)

This is where i get a little confused, so any help appreciated. if someone could confirm i’m doing these steps correctly please

Company A Quickfile account :
1.director deposits funds into DLA
2. transfer from DLA to current account £5000
3 Sales invoice to company B £5000 from loan account (money out) (not sure of category here)
4 Purchase invoice from company B £5000 - paid from current account

Company B Quickfile account
1 Purchase invoice to company A £5000- payment tagged to loan account (money out) (not sure of category here)
2 Sales invoice from company A £5000 - Payment tagged to current account (money in) (not sure of category here)

Am i right that this would create the appropriate balances? is there an easier way of doing this without purchase and sales invoices, and still get the correct transfer of monies but keep the two balances correct between the loan account and current account of each company?

i’m sure i’m over complicating this.


It’s more a case of assets and liabilities rather than sales and purchases, isn’t it? You just create a dummy bank account on both QF accounts to represent the loan, whenever company B takes more cash the transaction is a bank transfer in both QF accounts, for A it’s from DLA to the dummy loan account and for B it’s from the dummy loan account to current account. That way the loan will show as an asset on company A’s balance sheet and a liability on company B’s.

Income and expenses only start to come into it when you start repaying, where the interest would count as income to A and an expense for B.

(usual caveat - I’m not an accountant, talk to a real one if you want to be sure)

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