Hi, my name is Hayley. I help look after the accounts for my husband. Can you anyone quickly tell me how to setup 2 Directors Loan accounts. The first one is very small £150 which has been paid off and the other one was for purchasing a vehicle for use by the business only.
Please see this link it should help Limited Company Bookkeeping - The Basics
You should already have a Director’s Loan Account (DLA) set up as a virtual bank account. You would simply need to add another one to this list by going to the Bank Management screen, looking for the DLA, and then clicking this icon:
To make life easy for yourself, you could name the new account with the director’s name, for example, Directors Loan Account - John Smith. In the same way, you can rename the existing one (click the little yellow cog).
@FaradayKeynes has also linked through to our knowledge base which has some information on the DLA and how it works within QuickFile. In your case, you would have the 2 accounts for the 2 directors, and tag anything they have paid (or loaned) from their respective account.
Hope that helps, but please let us know if you need further help.
Hi both, thanks for the quick reply. When I go to loan accounts there is nothing listed and when I then click on the + it comes up with Create Bank Account and I cannot see Directors Loan Account in the list. This is for a Sole Trader so would the info in the knowledge base still apply? Sorry to be thick on this but want to get it right.
Hi Guys just a quick update I do not appear to have any Directors Loan accounts listed. Wonder if Martin has deleted it thinking he did not need it when first using the software.
If the business is registered as a Sole Trader, then there are no directors. Legally, there’s no separation between the business and it’s sole proprietor. So, instead of having a director’s loan account, you would have a Proprietor’s Drawings Account.
The same theory applies, you could tag any payments made by the sole trader from this ‘bank account’ instead of the current account. Think of the drawings account as their personal account, but only shows business related transactions.
There’s a bit more in the Knowledge Base about this too
I have previously posted this more detailed guide which shows how to account for capital put into the business, and drawings taken out. Although there’s no legal separation, when it comes to the self assessment, there are spaces to account for both of these things.
You can find the more detailed post, here
Thanks for the info. Right from the start we are a sole trader company. When I go accounts I do not get the options like you sholwed in your detailed guide
The first thing you need to do is have a capital account for the drawings account. If you don’t have one on your chart of accounts, you can add one by going to More Options > Add Popular Accounts, I only get as per the screen shot
from this under Equity Accounts I get
Under Loan Accounts I get this.
I wanted to show that I had put some money as a loan into the company which has now been paid back and also loaned the company money to purchase a van which is being paid back to our NS&I account directly. Can you please advise me how to do this.
The capital account is under Reports >> Chart of Accounts (see the little ‘video’ in the other topic I linked to). Your screenshots show the bank management screen. Apologies if this wasn’t clear.
To give you a helping hand however, I have added this to your account for you, so this will now show in your Chart of Accounts.
To show you’ve put money into the business, you would simply create a bank transaction on the ‘Proprietors Drawings Account’ showing money out, and tag it as a transfer into the current account. If you already have an untagged transaction in your current account, you can tag this as a transfer from your drawings account.
With taking money out, the reverse is done - tag it as money out of the current account, and into the drawings account.
You should, at year end, create a journal reflecting these amounts. Again, this is highlighted in the topic I linked to, but for your convenience I’ve quoted this below. In my examples, I used £5,000 of capital being introduced, and £1,000 of drawings being taken:
Which as a journal looks like this:
Figures used are just for example
And looks like this on your balance sheet:
If the money was just transferred, then you can just tag this as a transfer into the current account (or wherever you transferred it to) as per the above.
Hi QFSupport, once again you have been very helpful. I think I need to spend some time sorting his accounts out and getting my head around what needs to be done. Thank you for the very informative information.
HI QFSupport, sorry to be a pain but my husband has made an entry in Fusion and put it under Loans (2300). However the description is wrong he has put Load instead of Loan but I cannot see this in any account. Can you help as I need to show that he has repaid money on this loan.
If you to into the Chart of Accounts, and go to 2300 and click the magnify glass, it will show you a breakdown of each entry to that nominal.
Clicking this question mark will show you where it originated from. For example, it could point to a journal, or it could point to a bank transaction. Clicking on that description will take you to the place you can edit the description.
Hope that helps!