I am struggling to understand how to process a salary payment to myself which i wish to leave as available funds for the company.
My accounting has told me to use journal entries as follows
"Directors Salaries (7001) Debit £663
Directors Loan Accounts (1201) Credit £663
The payment also needs to be accounted for in Quickfile with the £663 debit entry allocated to Directors Loan Account."
is this correct?
Provided there’s no PAYE or NI involved then yes, those journals look right. You’re effectively loaning money to the company which it uses to pay your salary. The second sentence would only apply if you actually took the money out of the company bank account - the money out transaction on the company bank account would be tagged as a transfer to director’s loan.
Hi there, I’ve been inputting my salary to the Directors loan account and now I would like to pay myself, how do I journal from Directors loan and show the money coming out of the bank account ?
Director’s Loan is treated as a bank account so you just tag the current account transaction as a transfer to the DL account, there’s no need for a journal to do this.