Showing a loan from one business account to another

I have an account set up with quickfile and so does my husband for a different business, but on occasions i have had to lend money from one business to another, how do i show this from that account and enter it correctly and how would i show it in the account i am lending it to, (would it be in sales and the tagged to that loan account) Do i just set up new loan accounts in both businesses but will that drastically affect money in/out, especially where the money goes in and its already used for purchases, and where do i put any repayments back to that company. (is it logged under purchases.)

I try as much as possible to keep it separate, but i’m finding trying to show the flow of money between businesses confusing. Thanks for any help.

If you’re not charging him any interest then a loan like this won’t affect the profit/loss on either side. It simply becomes a balance sheet asset for the lender and liability for the recipient.

You would just create a new “bank account” of some sort on each side (probably a “loan” account for him and an “equity” account for you, but it doesn’t really matter). When you pay him a loan you tag it on your side as a transfer from your bank account to the new “loan to husband” account, and he tags it as a transfer from “loan from wife” to his bank account. Repayments work the same way, as transfers to/from the relevant account. At any given time the negative balance on his “loan from…” should equal the positive balance on your “loan to…”, representing the total yet to be repaid.


Thank you so much Ian, That makes complete sense and is very much appreciated.