Reimbursements??

monkeypuzzle47

If the company director has bought some items with his own money and then has given me the invoices for them and wants reimbursing, what is the correct accounting procedure?

Should i, set up some sort of reimbursement account?

i.e credit to the reimbursement account (liability to director)
debit to the various expenses paid for (ie. purchases/stationery etc)

Is this the correct procedure, or should it go through the directors current account.

im having a dim moment. many thanks in advance.

jen

groundy

Any invoices paid on behalf of the company by the director would be credited to the directors loan account and debited to the P&L / BS as appropriate.

When the director decides to reimburse themself then the cash/chq etc would be debited against the directors loan.

However, ideally any invoices whether paid by the company or the director should be invoiced to the company to ensure VAT can be recovered if applicable.

Hope this helps.:laugh:

monkeypuzzle47

thank you for your advice.

Poodle

Hi Monkey

I designed a basic employee/director reimbursement form for this type of situation. Microsoft website has some excel templates that you could play around with if you are not sure.

If you collate the invoices together and then get the director to sign the expenses claim form to confirm that all expenses are genuine business expenses then this should give you an nice audit trail should the transactions be challenged at some point.

Regards

Poodle

monkeypuzzle47

awh, thanks.

yes i did make up some claim form, clip invoices to back etc and then posted to directors loan account.

thanks for advice.

jen