HOME / COMMUNITY Switch to knowledge base

Reconciling personal expenses


#1

Hi, a quick sanity check please!

I pay back personal expenses (travel etc) via the directors loan account. I record each director as a supplier and then log each purchase against that supplier. I have 2 very basic questions:

  1. Even though the purchases have already been paid for by the individual, is it correct to log them as unpaid (as the company has yet paid for them) and then tag them as paid when the monthly payment is made from DLA?
  2. How do I group all the expenses for that director (i.e. supplier) so that the total expenses and the payment to the director tallies?

Thanks in advance

J


#2

The directors aren’t the suppliers here. The first thing to do if you haven’t already is to create a separate director loan bank account for each director, rather than just using the one DL.

With this in place you’d then just log each purchase as normal exactly as if they’d been paid from the company account (so with the date and supplier as per the receipt), and mark it paid from the relevant director’s loan account on the date that they paid it. At the end of the month the repayment to the director is simply a bank transfer from the company current account to that director’s loan account.


#3

Thanks Ian. That makes sense.

So do I set up a new loan account under banking? Does this mean that I will have to delete all purchases and start againe??

Also, whilst I am on, I am unclear as how to reconcile bank balances in Quickfile. To explain, I started using Quickfile in January to allow me to pay VAT electronically as per the new rules that come in next month. Of course we have invoices/purchases etc that pre-date January and so course of course the bank account totals won’t reconcile with this quarter’s activities. Does this matter and if it does, what is the best thing to do?

Thanks J


#4

Yes, you would need to set up a new bank account for each director. But no, you don’t necessarily have to delete everything to start over, though you might want to change the “supplier” on your existing purchases to be the real supplier rather than the director, if you want to keep the history consistent with how it’ll be represented from now on. Ultimately, as long as you’re confident that if the tax man asked you then you would be able to track back to the original invoice/receipt from the supplier for every purchase, that’s all they’ll really care about - it doesn’t particularly matter to them how you represent it in your books as long as the numbers are accurate and it doesn’t look like you’re trying to hide anything.

What were you using before QuickFile? Do you have any kind of “trial balance” from your previous accounting system that you can use as a starting point?


#5

Unfortunately we weren’t using anything a part from Excel, there was no need - we have an accountant who does our year end.

Do you know of anyway I can artificially adjust the starting balance?

Thanks for all the advice.
Jo


#6

In the bank settings screen there is an option to enter an opening balance.


#7

Thanks I’ll have a look


#8

Thanks Ian I appreciate your help