Moving money from DLA to pay off credit card

Accounting
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I have got a negative figure in my directors loan account so effectively money the business owes to me. I also have a negative figure on my credit card. I am trying to pay off some of my credit card from my DLA but whether I do a transfer or create a journal it is not working. If i manage to decrease the figure in the DLA then the credit card figure increases - can anyone please help??

a simple example; DLA is £-10, credit card is showing -£10 how to i get to a zero balance on both?

2

Hello @katie1cook

DLA is £-10, credit card is showing -£10 how to I get to a zero balance on both?

This is from the companies perspective.

So the business has a debt on the credit card (£10) and also owes money to you (£10).

The business would have to pay money off the credit card and it would also have to pay you money back

If “you” (DLA account) pay £10 of the credit card the business would owe you £20 (DLA = £-20)

1 Like
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Thanks so much for your reply - so how do i get back to a zero balance on the DLA? particularly if i have an issue with cash flow at the moment? or do i have to wait until i have the “£20” available in my current account and then take the money from there into my personal account?

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Hello @katie1cook

As it stands the business owes you £20 and the credit card company £20

The business would pay the £20 off the credit card and also pay you the money back (usually processed as bank transfers from the business current account).

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The DLA is a record of any transactions between the company and you as a director. This can include expenses which you pay out of your personal account, so the company owes you the money, funds you transfer in to help with cashflow, etc. It can also reflect money you have taken out of the company, such as “drawings” or dividends. If there is a credit balance on the DLA, then this is money owed to you by the company. This can be reimbursed by a bank transfer once there is enough cash in the company bank account, or it can be offset by any dividends declared, either as interim or at year-end. These do not necessarily have to be paid in cash if the cashflow is tight.
If you personally need the funds, though, then a bank transfer is the only way.

If you pay off the credit card out of your personal funds, than again, this is an expense incurred by you on behalf of the company, and so will increase the amount of money the company owes you.

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