If i pay by cash (Bank - Supplier Payment) then the net affect works (ie the relevant creditor balance has decreased and the cash balance) but there's nothing identifying that the director paid it.
Just put in the details 'paid by director' or set up a new bank account, say 1231 and call it 'Paid by director' and pay via that and when the director is reimbursed just transfer from the account he is being paid from into the 1231 bank.
If you posted them at the same time, the cash receipt from the director would come above/underneath the cash payment in the audit trail, so you could tie them up.. but Robs advice is spot on just to be doubly clear.
You might have seen in my other posts, that I create a dummy bank account called "Bank of Director" which allows you to post director ins and outs. Any balance can then be journalled to the directors account - I run that journal at the end of each month.
Perfect. Good advice @RobH and FoxAccountancyServices. I went with "paid through director" but if theres going to be more transactions I'm going to create a "bank of director" to make it easier to trace.
You can just select the particular customer in the debtor ledger account, and do a credit note against that invoice, booking the nominal code as directors loans (2103?) , add description, paid by director blah blah etc.
Then when the director wants reimbursement for it, just do bank payment with directors loan nominal code as the chosen code. If they don't want reimbursement for it, it will just reduce their directors loans as an out of pocket expense.
This keeps the debtor control account in order, the specific ledger account, the bank correct and directors spends correct.
