What is the quickest and easiest way to process a directors expenses in Sage? Set them up as a supplier and put through the receipts as invoices or set him up as a bank account?
I've never done both, so can't say which is quickest. But we found little difficulty in setting up a "Director's Loan Account" bank account and I think that is the usual method. The nominal code should be in the 1200s range. There was a certain amount of fiddling necessary with the Chart of Accounts, which I've forgotten exactly how to do, but even that can be avoided if you follow this advice which I am requoting from an old 2011 post here by semsley:
"To start with the bank accounts you have set up - they should be in the 1200 range and, depending on the numbers you have given them, you may need to go into the Chart of Accounts in the Nominal Ledger to adjust it so that they are displayed as bank accounts.
Possibly the easiest way would be to change the name of one of the standard bank accounts provided to Personal Bank Account - enter the pre-set up expenses as bank payments using the relevant nominal codes for the expense item, detailing Bank, Cr Cd etc in the detail column so the source can be tracked, then to clear this bank account put a bank receipt in using the DLA nominal account code. "
I usually set up a bank account for each director and then do a journal each month to clear it out. I tend to set up sub codes within the Directors Account code so theat I can break down the capital introduced and the drawings.
Thank you for your replies which make sense up to a point.
What happens when the Director takes the money he's paid out from the company bank account? Can I just transfer the money from the company account into Director Loan Bank Account instead of doing journals to clear it?
"Can I just transfer the money from the company account into Director Loan Bank Account instead of doing journals to clear it?"
Yes, just use the ordinary Sage procedure to transfer money from one bank account to another; i.e. click Bank then Transfer.
You might like to put some explanation in one or both of the boxes marked "Reference" and "Description", rather than just leaving the default description of "Bank Transfer" in place, so that the payments can be correlated with the receipts for the expenses in case of later queries.
