I have a new client that uses Sage and does not yet have online banking.(I'm a beginner on Sage and am working on the online banking issue!) but for now I am not sure how to record a couple of transactions.
He gets his girlfriend to pay supplier and labourers with her online banking and then he reimburses her with a cheque. How do I record this? the previous bookkeeper input the purchase invoices and paid via the bank but left no indication that the girlfriends bank account was ever involved. I'm sure this is not right although he has full paperwork to back up the trail.
Also, he has paid his girlfriends credit card in full as he used her card for business transactions, goodness knows why as he has his own credit card but it is done and as I have picked up a six month backlog it is too late to lecture him now, I can do so for the future though.
This subject was briefly discussed before and there was a reply concerning using the directors loan account for these transactions but I wonder if somebody could elaborate for me.
hi, I am hoping that I have the answer to this now, but please correct me if I am wrong.
Girlfriends credit card - input as bank payment from credit card putting expenses to directors loan account then credit bank account and debit credit card.
Hi Gerry, I dont know if I'm interpreting it incorrectly but what you have mentioned in your second thread doesn't seem like you are going to hit the P&L with the costs ?? You mentioned that the girlfriends credit card was used for business transactions, therefore need to go through the business P & L. I would suggest that you enter the invoices as normal in Sage then when you are posting the cheque you have paid the credit card off, post from the bank using the same cheque number (or BACS reference if paid by BACS) and allocate the payment against each of the purchase invoices you have previously entered. I would make a note on each of the purchase invoices that they were paid on GF's CC but reimbursed by cheque/BACS number on the specific date, therefore you have a perfect audit trail. I wouldn't touch the directors loan account in this circumstance - unless of course your client paid his girlfriends credit card from his own personal funds as opposed to the business money.
Although I stated that he has used his g/f card for business transactions, on further inspection most of the transactions are personal anyway, hence the directors loan account, so I guess I split the bill accordingly.
He appears to use the whole business as one big personal account and this is why I am having trouble getting my head around it, my previous job never had one personal expense. There appears to be loft conversions, car bills and all sorts going through.
Therefore is it ok and legal to set these people up as suppliers and then pay using the bank account providing I allocate the personal stuff to DLA.
At present there is many thousands owing in the directors account which I believe the accountant clears at the end of the year with a dividend.
I naively thought that a business account should be just that, I feel like his personal banker!
