I have made an error and paid for something personal with my business account. I have used a business debit card and now the transaction shows up in my business account and therefore in quick file. What is the correct process to follow to remove such transaction from my business account?
Thanks in advance
Tag it as something not on the list and use drawings account( sole trader) or director loans account (Ltd).
Understood, I will tag the transactions as a director loan and it will be like the ltd is giving the director money back. Thanks
Other way around - it’s the director who owes the ltd company!
When you make a personal purchase with the company card, what has happened is that you (the director) have borrowed money from the company, so you tag the money out as a transfer to the director’s loan account. The fact that you used that money to buy something is of no concern to the company.
When you reimburse the company for the money you borrowed, that is tagged as a transfer the other way, from the DL to the current account. Unless you’ve already lent money to the company in the past (so your DL appears “overdrawn”), in which case the personal purchase is effectively the company paying off some of that loan.
The DL account in QuickFile shows a positive balance if you owe money to the company, and an overdrawn balance if the company owes you.
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