Should the directors loan account exist as a register of all transactions between a director and the company?
I was originally taught to log all wages through the DLA, and all cash withdrawals, such that at the end if the year, a balancing dividend would be recorded.
The wage of £833 is recorded and taxed through PAYE. The director takes £2000 in cash.
£833 credit, £2000 debit to the DLA. The business is profitable enough to cover it comfortably.
Is there a benefit or problem with this method?