DLA personal purchase - how to tag/log

[stevetuk]

I’m used to logging DLA transactions to the business current account when Dirs have loaned the business money but I have a new one and need some help:

A personal purchase has been made from the business current account. This will be repaid by a Dir. How do I log this so that the transaction in the current account pays the purchase receipt and the DLA shows the money owed?

Sorry for being a newbie!

[rhc]

Hi,
I found this post which is maybe helpful for you

Personal transaction in business account

Hello, I have made an error and paid for something personal with my business account. I have used a business debit card and now the transaction shows up in my business account and therefore in quick file. What is the correct process to follow to remove such transaction from my business account? Thanks in advance

[stevetuk]

Thanks, but I’m confused about the transaction order of this.

The purchase receipt is logged (left unpaid for now).

If I pay this from current acct (which is what happened) then the current acct is accurate but the DLA is not (it’s not showing that the Dir owes the money).

If I credit the DLA (i.e. the Dir owes the business), and tag this as a transfer from the current acct reflecting the purchase, then the current acct is down (correct), the purchase remains unpaid (incorrect), and the DLA is up (correct) but then if I pay the purchase from the DLA it’s then zeroed out (incorrect).

I’m lost…sorry.

[QFMathew]

Hi @stevetuk

If it’s a personal purchase, you wouldn’t upload the receipt or invoice into QuickFile. Otherwise, it would be included in your profit and loss reports and skew your figures.

Instead, the “money out” transaction in the current account would simply be tagged as a bank transfer to the DLA.

[rhc]

Hi,
no invoices for private purchases. It’s private and nothing to do with your business, so shouldn’t be recorded in your business

[stevetuk]

Ok, I think I understand. What if the business then sells the item back to the Dir in that case and raises an invoice?

[daithespark]

It may be best to ask an accountant to make sure its dealt with in the right way. Slightly different with me as I’m a sole trader but I would imagine there’s some things to consider when you do it

[cbstephensaca]

You just tag the money out from the current account straight to the director’s loan - no need to raise a purchase invoice at all. It’s nothing to do with the business.

[cbstephensaca]

The business hasn’t bought the item, it’s merely loaned the money to the director to purchase the item. Therefore it cannot sell the item to the director as s/he already owns it.