Sage Line 50 Directors loan account

jackieshep

Hi, can anybody help me with a query.

My boss has a small limited company and pays himself a regular dividend each month. It shows as a (minus) figure on the balance sheet as I have used a directors loan account for both deposits of money into the company as well as out. Needless to say that as he has taken more out than put in it shows as a minus. I have used nominal code 2104 which is part of the short term liabilities group of codes. Should I put another nominal code in the set of accounts for withdrawals as I'm a bit concerned how the balance sheet looks if it is shown to the bank, and leave the directors loan account to deposits he makes into the company.:confused1:

Your comments would be appreciated.

Many thanks

Poodle

Hi Jackie

I always open up a bank account in Sage for the DLA it makes life easier when posting entries, in and out, all in one account and easily put into date order for any required audit.

If you call it 'Directors Loan account' then it should not cause a problem as it will be blatantly obvious** to anyone looking at the acocounts and can be easily picked up and popped into the correct place dr or cr when the FS's are prepared.

Poodle

** Exception HSBC bank managers!!

jackieshep

Thanks for your help Poodle. I did wonder about setting up a bank account, but wasn't sure if it was the right thing to do.

Kirstie

n.b. as well as setting up the new nominal account, it would probably be worth amending the COA to show the account on a seperate line (so it appears as such on the balance sheet). If you create it in the floating range it'll show up as either an asset or liability (as applicable).

jackieshep

Thanks Kirstie.