Hello, my business has cash flow issues so I’ve been using my DLA to manage my salary. I think I’ve gone about this the correct way but was hoping someone could reassure me.
I’ve been paying myself a fixed monthly amount via PAYE. If there isn’t enough cash in the business to pay me at the end of the month I only take what the business can afford (if anything) until further invoices clear. The full amount is still processed via payroll and tax/ni is paid.
For this partial payment I am tagging the withdrawal on the bank account as “Directors Salary (PAYE)”.
I then log any remainder due as a ‘money out’ transaction on my DLA.
When funds do become available, I withdraw the DLA balance from my bank and tag this as a transfer from my bank account to the DLA (so a DLA ‘money in’ transaction is created).
So, assuming this is the right way to do things, once I’ve created the ‘money out’ transaction on the DLA, should this then also be tagged as “Directors Salary (PAYE)”?
Many thanks in advance!
Regards,
Ross.