I wonder if anyone could offer some advise as to the directors loan account.
From what i can find on the internet a directors loan account with
a) Positive balance, means that the Business owes me money
b) Negative balance, means i owe the business money.
also from what i read that “out of pocket” expenses with directors own money should be recorded as a normal transaction except from the directors loan account ??
another issue i have is say:
I had to make a personal purchase, but used the “business card” say for £80, now following the above.
When i have imported the statement in to the business current account on QF, i tag the £80 as a transfer between the “current account” and the “directors loan account”.
This seems wrong to me though as it wasn’t a business purchase and the transfer puts the “DLA” into credit i.e. “owes me money” yet this should be the other way round, i owe the business the money as it was a personal purchase.
On previous systems i have used, i have had the option to be able to tag/change the transaction type to “money IN” or “money OUT” on QF this doesn’t seem to be possible.
Unfortunately i have many transactions like this and am i also even unsure how to manually do this, as i also have the added problem, that i have quite a few split receipts, i.e. “paid with business card” and some things on the receipt are for business and some are personal.
It would be a massive help if someone could point me in the correct direction on dealing with this transactions, or maybe an option in QF that i seem to be missing ?
Ok after more searching, i think i have found the answer, although it is very confusing, as most users will look at the directors loan account balance and see it showing credit and think that it owes them money.
from what i can see when looking at the balance sheet is that credits on the directors loan account are actually debits, i.e. the accounting is reversed, so if the DLA is in credit on the banking screen then you owe the company money, and if it has a negative balance it owe you money.
Since most users are not accountants or book keepers, surely some way of pointing this out to users to explain how this works ?
Searching the internet isn’t very helpful, and i have literally spent hours searching as i thought i was doing it wrong, i even deleted all my bank transactions and payments to start again, which i now have to go through and re-tag all of them.
QuickFile software is great, and the help section for the most part explains most things very well, but the help on dealing with the director loan account and how it works, would be great if it could be a little more informative to the average user who isn’t a book keeper or accountant, and bring it up to the same great level as the software, software is only as good as the user manual which informs users how to use it, a customer who struggles to use software and find helpful or informative instructions, could end up not being a customer at all.
The problem with this approach is you can dumb it down too much and then things become overly complicated what with all of the added explanations and simplified procedures and then things that should be simple for an advanced user to do in a couple of clicks are now complicated.
If I find Quickfile too difficult I can pay a bookkeeper to do my accounts for less than a couple of hundred quid a year. I could easily waste that much in a day trying to learn how a DLA works.
LOL, true, however in my opinion any business owner who lets someone else do most of the work for them doesnt have much information about their business except what a book keeper or accountant tells them, i prefer to know how my business runs and exactly what money is going where, and keep an eye on the health of my business at any time.
Most things are easy to learn or pick up when a good explanation or example is in place.
At the end of the day, a business owner or directors are ultimate responsible for the business/company’s accounts & paper work, this is how HMRC see’s it, i have fallen out with an accountant previous and found it hard for them to give over the information they have, and been late with accounts and filling etc due to this, i do employ an accountant, but i also try to do as much as i can, keep down fee’s, know where my business is at, it also makes it easier for moving accountants if i aint happy with there work, and then theres the bank, if i need to go to the bank for say a loan, i have better insight in to my business money in/money out, turn over etc etc.
The more i know how my business ticks, the better for me and my business.