Director Loan Account tag

Accounting
1

Hi
What account/ tag/ do I use when repaying (to myself) a Director’s loan? 1201 or
7002
Thanks

2

How did you record it when you gave the loan to the company in the first place?

Normally if your company owes money to you then that would be represented in QuickFile by your Director’s Loan bank account 1201 showing an overdrawn balance. Repaying the loan is therefore simply a bank transfer from your business current account to the DL account, making it less (or not at all) overdrawn.

3

Thanks Ian,
I set it up correctly. Now’s the first payment
So it’s a tranfer rather than a payment.
Makes sense now!
Cheers

4

Yeah, just think of the Director’s Loan bank account balance as representing the amount that either you owe the company (if the balance is positive) or the company owes you (if the balance is overdrawn) at any particular point in time. When you lend actual cash that’s a transfer from DL to current, when you are repaid actual cash it’s a transfer from current to DL. If you make a business purchase with personal funds, you log that purchase as being paid from the DL account instead of the current account - you’ve effectively lent the company some money with which to pay the expense.

5

If i recorded wrongly in the first place that i paid with bank transfer instead of my own funds, and now the bank balance shows negative, how do i transfer from the minus bank balance into the director’s loan?
tks

6

You may be able to find the original payment (find the purchase record in your list of purchases, then follow the link at the top saying something like “a payment has been allocated to this purchase”), then change the bank account from there. If that doesn’t work then find the bank account in your “balance sheet” report, click the magnifying glass on the right to get to the nominal ledger view of the bank account, find the original payment transaction (which will be a “credit” transaction in the nominal ledger), tick the checkbox, then “move to new code”.

7

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