I have a limited company. I linked my company’s PayPal account with Quickfile and transactions automatically show up on Quickfile. The problem is, I also made some payments unrelated to the company (not invoiced to the company, they’re invoiced to my name and personal address) using the PayPal account. I have deleted those unrelated transactions from Quickfile. Now I’m wondering did I do something wrong? If yes, what do I need to do?
Also the PayPal account balance seems incorrect now since the unrelated outgoing transactions are deleted on Quickfile, would that be a problem in accounting?
When you make personal purchases using limited company funds what you have effectively done is borrowed money that belongs to the company, and this must be recorded in the company’s books - you now owe the company money which you will need to either pay back or offset against your salary or dividends at some point in future.
So the correct way to deal with it in this instance would be to tag the money out transactions from the company PayPal account as bank transfers to the Director’s Loan account. But going forward you should avoid mixing personal and company activity in the same PayPal account, each legal entity (you and the company) should have its own independent account so it’s clear which money belongs to whom.