Which is the best way to Directors Expenses through a Company Account.
Do they become a "Supplier" and then paid, breaking down the components of the expense across all the relevant expense sub-heading, or should it be run via a Directors Expense account in Solar

Hi Merrick,

Record these expenses as normal (ie. allocated Rent, Telephone, etc) but set the Paid From Account to be the Directors Loan Account instead of the Cheque Account.

Regards,

Hi Merrick,

This is what I do, as Mark suggests.

I record the expense with one side being the expense a/c and the other being the directors account. Periodically I then make a payment of lump sum to the director who is defined as a supplier at defined intervals, one side being the current account and the other side reducing the directors account balance. That way my VAT is accounted at the proper time and I can track payments to the directors.
At the end of the year if the directors account has a balance owing to the director I add it to any dividend to be paid and pay the lump sum to the director.

Hope that helps.

Joe.

Is it ok use this principle for expenses on a monthly basis? (with a printed Spreadsheet expense form & attached receipts for documentation purposes).

Raise a "Money Paid Out" on the date of the expense form (end of the month) with:
- Pay to: the director as a "Supplier"
- Pay from: Directors Loan Account
- Allocate to multiple accounts according to the expenditure type
(Motor expenses / Travel / General office costs / ...)

Also is it ok to use this "Supplier" as the same person for Wages?

Thanks once again!

Hi Daniel,

Yes your approach looks fine to me!

Cheers