How to account for private purchase

Hi

We’ve just made a purchase off eBay, which has our private credit card attached to the account, but we now want to sell this item through our Ltd company.

How do I account for this, do I just list it as an expense, or could I raise a purchase invoice and pay the money back to our private account? I’m really not sure of the best way to deal with it so any suggestions would be much appreciated, thanks.

CAL

Hi @CAL

If I’ve understood correctly, you’ve bought something on behalf of the company, but paid using your personal credit/debit card - is that correct?

If this is the case, you can just raise a purchase invoice as per usual for the purchase, and mark it as paid from the Director’s Loan Account (DLA).

This will show the DLA as overdrawn which means the company owes you money, so you will need to pay it back eventually (from the company to your bank account), which is then tagged as a bank transfer to the DLA.

Think of the DLA as your own personal bank account in relation to the business.

There’s a more detailed guide on the DLA as part of this article:
http://community.quickfile.co.uk/t/limited-company-bookkeeping-the-basics/8809#2

Hope that helps?

Thank you so much for your clear explanation, that helps a lot.

1 Like

Hi
I have a follow up query to this one,
I had been using quickfile for just invoicing etc, but now including DLA and directors expenses. However I have a minus amount from the previous year. How do I add this? The directors account does not seem to like minus starting amounts. Also how do I set up an additional DLA, when I have tried to do this, it seems I am being asked for the main bank account details which the system then reject as being duplicates.
Many thanks
Barbara

You don’t have to enter any sort code, account number, etc. when creating a bank account - everything but the account name is optional.

Ok many thanks will try that
What about the starting amount of a minus amount from the previous year where I was not using the directors accounts?
Cheers

@ideas4learning,

Providing there are no transactions linked to this account you should be able to amend the opening balance -this can be a negative value.