Hi. Hope someone can help please? Last month I paid an invoice with my directors's credit card as I needed the item quickly. The invoice had been entered on Sage so i marked it as paid from the bank account. Then my director put it on his expenses and i paid that. so in essence it went out of the sage bank account twice!
I have only just taken over the finance section and i dont know how the previous person dealt with this in the past as it does not appear that she used the credit card account rather than the bank and i dont want to make the same mistake again.
The credit card is not a company card - it is my directors private card.
Can anyone help so i dont make the mistake again.
He claims everything through his expenses if that helps.
I don't use Sage so this is a principle based response rather than specific to your software.
You need to reverse ONE of the transactions using a journal. That sorts out your main issue.
The other issue that you have is the director using a personal credit card. Treat that as a DLA (Directors Loan Account) by creating a seperate bank account for it. If you already have a DLA bank account in your system then you can use that rather than creating a seperate one just for the credit card.
Only legitimate expenditure is recorded in the companies books, all payments to the DLA are recorded (basically money that the director is taking out of the business), so, at the end of the period the expenses are balanced off and the difference is directors drawings which the companies accountant will then generally clear with a dividend and supply you with a set of journals that you need to enter in Sage.
Hope that helps,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I did reconcile the bank but it was the exact amount down of the invoice. Because technically it appeared that i had paid it twice. Once through supplier payment and then through expenses to my Director.
I think i have to not go through the bank in Sage when paying with the CC again. Although looking at the way it is set up on our system it doesnt appear that any other account is set up only the bank. No cash account etc.
Hi Penny
Do you know what to do to sort out the item that has been processed twice? Also how to set up another account - I would encourage you to process such things through a 'Bank' account, just not the main one, one called Director's Bank which you can then clear from his Director loan. Its easier that way than journals if you arent used to doing them, expecially if there is VAT involved. Plus some of the older sage versions dont allow journals in bank recs.
Let me know and I will try to point you in the right direction, or someone on here will. Might need to ask some more questions of you if you need help, but dont want to be posting loads of blurb if you have sorted it!
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
