Reimbursed expenses to director

[marian145]

Hi,
I need help to record reimbursable expenses paid to director.
Directorr submitted expense claim for business mileage ( which were paid by personal money) and now I want to create journal to reimburse him. Payment is always made on Fridays so I need double entry which will refer to future payments.
This is what I think is correct:
Record expese for future payment:
Cr Reimbursed for Director (liability) Dr Travel and on date of payment : Dr Reimbursed Director acc Cr Bank
Am I correct???

[FaradayKeynes]

that will be
Dr Travel
Cr Bank

[Ta_Riq]

there are 2 treatments for this business event
1- when expenses are paid from the personal account
you will have to create a liability to the directors and record expense
Dr. Travel expenses
Cr directors reimbursements
and
2- when directors will get the money back from the business
Dr directors reimbursements
Cr Bank account

by doing this you actually show that the business had borrowed money from the business for travel expenses and then the business returned the money from the business account.

[Ta_Riq]

in that case how would you show record the money borrowed from directors and then the business paid them back?

[QFMathew]

Hi @Ta_Riq

As the Director’s Loan Account is treated like a bank account, using this to track the expenses and what’s owed, would be the best way forward.

[Lurch]

It’s 6 years ago, I think they have probably sorted it by now.