I do hope someone can help as I have gotten myself in to a state of confussion over this!
I am using a sage sofeware solution and need help with the double entry on some directors loan account postings.
I have a directors loan account that has capital inverstment which is fine and so are the posting, however I have some expenses posting which need to hit the P&L but also need to credit the directors loan account as not all monies have been paid back to them and as we are at the year end we are wanting to show the correct directors loan account balances.
I thought the best way to do this was to creat a supplier account for each of the directors as they also raise monthly invoices for fees which have also not all been paid back to them. by doing this I thought it would make my p&l correct each month with expendure, however I am now wanting to credit the amount not paid to the loan accounts and I am unsure as to where the other side of the entry should sit.
should it be DR suppliers control account ? CR directors loan account ? this would then mean that my adged creditors report balance would not match the control account balance.
should I use a suspense account but this would then leave an un-nessary balance.
do i raise a supplier credit note to to directors loan account?
Currently my p&l is correct for each month but my directs loan account is not am really at a loss of how to make both the p&l charges and the Directors loan account right.
If these are just expenses that have been paid by the Directors in their line of work and need to be reimbursed, I would not put them as Directors loans.
I set up an Expenses supplier account on Sage and post all expenses (both staff and Directors) there. This will allocate to the P&L and show the expenses as a creditor. The when you pay, you simply allocate via the bank-supplier tab and pay them.
