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How do I account for personal drawings from a company and directors loans to a company in Reckon One

edited April 2020 in Reckon One
How do you account for directors personal loans to a company, and directors personal drawings from the company?


  • Michael MacleodMichael Macleod Member Posts: 33
    edited January 2017
    You will need to set up accounts for each of the directors ie Director Loan-XYZ in Other Liabilities and a Drawings -XYZ in the same section (or you can charge drawings to the Loan Account) and you post to those accounts for any loans or drawings whenever a payment or receipt is processed

    Michael m

  • Kwikbooks (Professional Partner)Kwikbooks (Professional Partner) Member Posts: 876
    edited April 2020
    Hi Catherine

    Michael's suggestion is spot on, especially if the directors have put in lump sums of capital and it stays in the company. - drawings is usually an equity account, while the capital (Loan) is a liability.

    However.... the but..... depends on what and how much you need to track from/to drawings, I have clients who live out of the company, sometimes 50 transactions a month, and then they buy stuff for the company from their own pocket or non tracked personal accounts or credit cards.

    So I set up a bank or credit card account which can be used much easier for many transactions - you can call it whatever 'drawings to/from'  'Directors loan to/from.  If the bank transaction is for drawings, you simply write the cheque to 'drawings' & it tracks to the bank/ccard account with a memo. .. i.e groceries, soccer etc.

    At the same time if they buy stuff for the company and want to claim it, you can enter the receipt from the drawings to/from account straight to office supplies, tools etc. this eliminates the need for jnl entries.

    I would keep this type of drawings account separate from any lump sum Capital put in, as well.

    ** note, I always set up a sub account for drawings to track medical separately, and anything else the accountant my need to know, i.e. mortgage payments, building improvements if they own it.
  • SherylSheryl Member Posts: 42
    edited April 2020
    Catherine I appreciate your comment.  Can you assist me with the current situation I am in.  Its probably straight forward and I am making it difficult.  I came in as office manager.  The Director is owed money from purchases for the business he made from personal funds.  To keep track of these purchases he was set up as a supplier.  The purchases were all coded to the specific accounts the purchases were for under his supplier account.  My query is this:  How do I code funds that are paid to him from the business account to reimburse these expenses?  Do I simply follow the process same as paying any other supplier?  ie  pay bills and I select his account then apply the funds towards the owed reimbursements?  Or is it acutally  more complicated than that and I need to do a Journal Entry.  I can see that in the past to clear these reimbursements a Journal Entry has been done.  To be honest, this is very confusing for me.
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