Hi,
My company A has a purchase of £10K, which is funded by loan from company B. A has yet to repay the loan. I can’t log a payment to the purchase because the drop down list has nothing like ‘company loan account’. Now my solution is not to log a payment, but create a journal to debit Credit Control Acc and credit Loans From B liability account.
What is best practice?
Thanks
Hello @sy8111
How is company B set up?
How have you shown the receipt of the £10000 into Company A’s accounts?
Does the purchase involve any vat? (the vat return would not pick up the journal in you suggested solution)
Company B is another LTD. What do you mean “how is it set up?”.
The purchase has no VAT.
Ideally the best way is I can directly log a payment to a Liability account called “Loan from B” but it’s not supported.
Hello @sy8111
Company B is another LTD. What do you mean “how is it set up?”.
You need some way of showing that the money came from them/ that you owe the money to them
You could set up another bank account in the banking screen for Company B, similar to a directors loan account.
Record the payment for the £1000 purchase from there, that way it would show as a liability in your accounts.
As you pay the money back to them record bank transfers from your bank to the loan bank.
You should not raise journals to the creditors control account. If Company A has not received the funds from Company B, and B has just paid the purchase directly, then what @QFSteve is suggesting is the best way around it. Just bear in mind at the end of the year though, the account should not be shown as part of your bank and cash balances, but should be shown in liabilities (either short or long term, depending on the agreement). If the funds have been transferred to Company A, then just tag the bank receipt as “something else not on the list” and credit it to a liabilities account (you can set one up specifically for Company B).
Thank you and @QFSteve
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