Paying myself expenses

Hello Glenn and team,

Some time ago I asked how to record expenses and after your replies and advice have been paying these into my Proprietor Drawings Account. However, I have not for many months actually paid out these expenses into my own private bank account.

Now when I look at the Proprietor Drawings Account I can see several thousand pounds in there including all the amounts I have entered including things like Payment to Expenses: Approved Mileage. My struggle to understand what I am seeing is this - it all appears like a bank account my SALARY shown as Money coming in and Expenses as Money going out. But in reality I haven’t actually transferred this money out of the physical bank account - and need to. I am just unsure how to do this so that the Proprietor Drawings Account will record it correctly.

Some of the transactions have a red cross to the right of them and some do not have one - what exactly does this mean?
AS I come up to the end of the financial year I need to get this in order and hopefully your can help me do this.

Thanks you for your help and advice


Any expenses you have credited in drawing account, you can withdraw money by debiting drawing account and crediting bank.

In future any expenses you want to claim and withdraw , you can just physically take money from main bank and tag entries as expenses, no need to route it through drawings

Hello and thanks for the reply on this subject. I am still a little uncertain as to what exactly I should do within Quickfile. When you say debiting the Drawing Account do you mean simply putting an entry in there which would total the added amount of expenses - i.e. one months worth of expenses on Quickfile equates to 10 line entries [which for this example adds up to £100]

In future any expenses are simply TAGGED as Expenses in the main account? This was what I thought at first but was told by quickfile to do it the other way? Confused?

Many thanks

You can do one journal entry for bulk figure, go to reports> journals> new Journal

first line (3100) Proprietor or Partner Drawings enter amount
2nd line (1200) Bank Current Account enter amount

Many thanks for your reply. I wish I could understand this as it all must seem very easy but I am at a loss to understand it. I will take a look again at this tomorrow as at the moment is all looks a bit messy.

Again thanks for your help.


Edgers - I share your pain exactly. This is the main area of Quickfile that I am struggling with to understand the best approach. I am not an accountant so my ignorance is probably laughable to anyone who knows what they are doing. Perhaps if I use an example someone may be able to suggest a better approach.

I want to know the best way to record/claim cash expenses. For instance my mileage. Typically I record them as a new transaction in my Directors Loan Account. I tag them as “Expense: Authorised Mileage”. They appear as Money Out in the transactions list. When I come to claim my expenses from my limited company, I transfer money from my main business bank account, and credit the Director’s loan account with the same amount. Is this a sensible way of proceeding? The downside is that in the Dashboard the summary of “Money You Owe” remains at 0.

Another way I have been experimenting is to use the “Log a Purchase” button from the dashboard. This allows the item to show as unpaid, however I’m then unsure how best to process my expenses claim. I use the Bank import routine to bring in my transactions from my business account, and so once I pay myself the expenses there will already be a record in my bank statement. So I’m a little confused on how to reconcile the two.

Any advice on the simplest appoach very welcome…

If you are paying mileage expense from bank accounts then go to bank screen, input transaction and record payment amount and tag as travelling expense, in description you can give details e.g mileage for director, miles and any customer/job ref for record

If you are not taking payment now and recording against director a/c, you can do above under Direct account and once you actually pay it from bank then tag transaction against director a/c from bank screen

I am a sole trader; on the subject of expenses, I plan to take my wife out for a meal to mark a small milestone in the business. Will the system entries be Dr 7403 (UK entertaining) and Cr bank (1200)?

With regards to class 2 National insurance contributions - I have set up a direct debit to pay these from my business current account. Will the entries be Dr 1202 (prop drawings account) and Cr bank?

Would be grateful for confirmation (or otherwise) on these two points. thank you

both would be drawings

Why is the first scenario (the meal out) not classed as an expense to the business?

Its is not a business expense, that is why

Hi - did you ever fully resolve things here? It’s just that there has been a lengthy thread running on how to treat NI contributions (and expenses) in the books. One useful guide for approved mileage expenses is

If you haven’t already looked at the thread I mention, could be worth it…

Hi Gardenman,

To be honest, and in agreement with purple salix, I am not an accountant and event the explanation from Faraday I cannot get my head around. I was told 2 years ago when I started off working for myself using Quickfile that the best way to record expenses was through the Proprietor Drawings Account - which I worked out how to do through the help files; but cannot get my head around the process as it shows up a balance like a bank account rather than showing zero when I have paid myself my expenses back.

In explanation on this I have recorded all my expenses through the Proprietor Drawings Account and over the two years have had nearly 3 grand expenses. Each expense is on a different line also I have a vast array of Red Money Out plus a few Green Money In which should total the same overall amount (personally I would have thought that the when I paid myself the expenses it would show up as Red money out but NO it shows up as Green font Money In…) however rather than the overall balance column showing zero to reflect that what has gone in and out now make zero that balance shows my nearly 3 grand still - this makes no sense to me and causes monthly confusion as I try to work out at the end of ever month how to do my expenses.

The trouble is I earn so little no account would touch me as they are not going to make any money out of me. And no amount of me asking questions has given me any explanation I can understand.

However, thank for the link - i will take a look.

I think this thread needs to be narrowed down a little as the process is different for Limited Companies when compared to Sole Traders. I understand @purplesalix is trading as an LTD whereas @Fanflame is a sole trader, please correct me if I’m wrong?

The process for Limited Companies is a little more straight forward as the Limited Company is a distinct legal entity from it’s directors, unlike sole traders who’s business and personal finances are more intertwined. But the proprietor drawings balance is not so important for sole trader accounting, so @Fanflame, please see the points I’ve made further down.

Just as a separate reference, if you’ve not done so already please refer to the following two guides:

For Limited Companies

For LTDs everything revolves around the Director’s Loan Account, this is a type of bank account in QuickFile but all it does is track how much money the company owes the director or vice versa at any given time. So as a director I pay £20 for some company stationery using my own personal debit card, at this point the company owes me £20. I would log this as follows:

  1. Enter a purchase invoice in QuickFile for the £20 stationery purchase and pay this into the Directors Loan Account.
  2. Now (assuming the DLA was at zero before) the DLA account shows as £20 overdrawn, like any other bank account would. An overdrawn bank account in the name of the company is a liability on the balance sheet.
  3. A couple of weeks later I want to reimburse myself the £20, so I make a BACs transfer from the company LTD to my personal account.
  4. The withdrawal shows on QuickFile as a debit from the company account, now I tag this as bank transfer to the DLA. This brings the DLA account back to zero, to show that the company has no further liability to it’s director(s).

Really that’s all there is too it, whenever you incur an expense as an LTD you record it and later reimburse on the DLA account. A DLA in credit means the Director(s) owe money to the company, in debit the company owes the director(s).

For Sole Traders

In sole trader accounting we’re only interested really in recording those expenses that are business related, anything else is not relevant. Unlike LTDs sole traders have no legal distinction between themselves and the business.

It can be confusing but you can’t owe your business money as they’re one and the same, but a director can owe money to his/her LTD as they are distinct legal entities.

For sole traders you would normally use the Proprietor Drawings Account to dump anything that is regarded as a personal expense and not relating to the business. It doesn’t need to be balanced off it’s just a way of categorising certain entries on your bank statement as non-business, so you just tag it as a transfer to the Proprieter Drawings Account.

The Proprieter Drawings Account is not so important for your final tax calc so I wouldn’t worry to much about the balance there. The most important thing for sole traders is having an accurate Profit and Loss report at the year end, to which end the proprietor drawings account is not important as it’s a balance sheet account (like all bank accounts).

If the cross is greyed out it means that the transaction is locked, normally for one of two reasons, it’s been reconciled in a VAT return or it has been locked down by closing an accounting period.


Following the post yesterday we’ve now added a new Knowledgebase article below which should clarify these matters further. This one is for sole traders and partners (i.e. non-limited entities).

Self Employed Expenses

1 Like

Thanks for this Glen,

It is an interesting read and it appears that it is really not that important as long as I have tagged it as I have in the PDA account. Thanks for looking into this for me.


Thanks for this too Glen it is a really good explanation and gives a much better and easy to understand perspective on Sole Trader expenses. It appears I was doing it right all the time just didn’t understand why I was doing it that way. I can also now taylor the way I am presently doing it to make it a little more streamlined as well.

Thanks again for a great FREE product that is so useful to me.