Payments made from personal account

Effi Ogunbiyi on 23/05/2017

Hi, how do I record payments made from my personal account for business expenses?

Merijn Campsteyn on 23/05/2017

For this scenario, you can make use of a director's current account.

The first step will be to create a new general ledger account that will be used as a current account (if no such account was already created). To do so go to "Accounting" > "Accounts" in the left menu. Click on "Add account" on the top right of the page. Now enter a code and a name for this account. Pick "current liabilities" as the account type. Make sure to check "Allow payments to this account". Click the submit button. Now our director's current account is ready for use.

Enter the expense you paid for with your personal account just like any other expense or purchase invoice. Once you have entered all the details and approved the purchase you can register a payment using the form at the bottom of the page. Instead of picking a financial account (such as a bank account) you now select the director's current account from the drop-down list. If you can see the account on the list you most likely forgot to check the "allow payments" checkbox during account creation. You can always edit this setting is needed.

The result of this operation is that the payment of the purchase is now recorded as a debt owed by the company to you. You could choose to pay it back from the companies bank account or leave it as a debt in case you don't immediately need the funds back.