Directors Loans (transfer or 'salaries, dividends and other payments')

Hi,

I receive a standing order from one of the directors which currently when received I choose the ‘transfer between accounts’ and choose the directors loan account for the appropriate director (I have two entries).

Q1) Why are there two mechamisms

Q2) should I be putting it through ‘transfer between accounts’, or ‘salaries, dividends and other payments’? The latter seems to be a generic directors loan account where I can type the recipients name, but I want to keep a balance for each director.

Q3) I’m sure I’ve used the latter sometimes, so can I re-assign to the specific directors loan account, even after submitting VAT returns?

Q4) How do I get a report that shows all of the directors loan accounts (nominal codes 1201/1252 in my case)?

Hi @devologyrob

I’ll try and address your points for you.

  1. It’s just because people do things differently. Both have the same effect, in a similar way that Ctrl + S does the same a File > Save in other pieces of software like Microsoft Word.

  2. The choice is yours. As you rightfully say however, using the transfer option does allow you to post to an individual account, whereas the salaries option is more generic. If you’re dealing with separate directors, the first option (transfer) is the more suitable option.

  3. If they are just transfer, then yes you can reassign them. Only if a payment is against an invoice and you’re on cash accounting will it be locked because of a VAT return. You may interested in the bulk movement tool to help speed up that process

  4. Your balance sheet report will show all the directors loan accounts (either as an asset or a liability, depending on whether the business owes the director or the director owes the business). This would show them individually and at a particular date. The other options would be to use the Chart of Accounts, or even set up a custom report specifically for those nominals.
    However, one thing to be aware of, is the bank account view is backwards to the chart of accounts (this is just the nature of bank accounts). So in a custom report, you would need to do a formula similar to (1201:1252)*-1 to show the bank account values.

Hope that helps!

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