When using an online bank, accounting wise, how do I show cash deposits that the directors receive? A lot of what we are going to be doing is going to be cash based so I wondered if it is even possible to use an online bank and whether the director can deposit the cash in their own personal bank account and then transfer it across to the business online account? I just want to check that it would be ok to do this and the accounting would be credit revenue, debit directors loan then when the money gets transferred (which will be in the same week) I would be crediting directors loan and debiting bank.
Is this correct? Plus does anyone know if that is acceptable business practice? Since we are start up, I am trying to avoid any fees for cash deposits via the post office and really like the benefits of the online bank so don’t want to move away from that idea.
Any advice would be much appreciated.
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This a really daft idea. You can bet that it will result in a shambles, with directors keeping some cash for 'expenses' which then won't be documented. Directors will also 'forget' to deposit cash. You should get an account that accepts cash deposits, and insist that all sales get paid direct into it, with no netting off for expenses etc. The higher bank charges will be nothing compared to the cost and trouble they will save elsewhere.
