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Director banks client fees into personal account?

Director's loan, credit, bad debt?

I've got a query about the cleanest way to log this on Sage One - or Sage Accounting as it now calls itself... An invoice issued to a client account, with values under 3 sales nominals, has subsequently been paid via cheque, incorrectly issued in the director's name, not the company name. The director took the cheque and banked it in their personal account but hasn't transferred the money to the company (and likely won't!) - so I need to deduct the value from the director's loan account on Sage and mark the client invoice as paid.

What's the best way to record this - a credit note for the value against each nominal, then a journal entry for DLA and the sales nominals? We operate under cash accounting for VAT (which is new to me) so I'm wary of this being incorrectly logged... technically they've paid so we're liable for VAT, but there have been no funds received by the company - so no VAT? Confused!

Thank you!

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By carynw
14th Mar 2018 12:45

post a receipt as if the money had been received then post a payment for the same value to the directors loan account

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14th Mar 2018 12:46

I am no expert in Sage, but would simultaneous equal and opposite bank entries not achieve the desired result?

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14th Mar 2018 13:29

Clearly I was missing the obvious, this makes sense thank you!

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14th Mar 2018 13:38

I would always set the DLA up as a dummy cash account.

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By Ruddles
14th Mar 2018 13:41

You could always designate the DLA as a bank account in Sage - after all, that is how many directors see things!

EDIT - beaten to it by Chris. Cash account works just as well, until you try and overdraw it :) (Does Sage allow negative cash balances these days?)

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to Ruddles
14th Mar 2018 15:53

'Does Sage allow negative cash balances these days?'

Yes

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