Reimburse director for business expenses paid using personal funds.


I own a Pty Ltd, so my accountant had me setup the following account in order to record business expenses paid with personal funds:

Chart of Accounts-> New Credit Card ->Director's Loan Account (GST CODE: GST-FREE).

Then record as Normal the suppliers details and create a new expense, but selecting Directors Loan Account as payment source

·         Directors Loan will become $1100.00

Once that is done, I need to process the reimbursement. I log into my business banking account, and transfer $1100 into my personal account. I then refresh the bank feeds in Quickbooks in order for it to pickup the transaction.

I'm unsure about the next steps. Type do I match this bank feed against: (Expense, Cheque or Transfer). Is it TRANSFER, and then I just select the "Directors Loan account" ? That would then put the Directors Loan account back to $0.00.

is this the correct way to do it?


13 people found this helpful

Frank, what your accountant did is both clever and correct.  When you pay business expenses with your personal funds, treat that as a credit chard charge, on the books of your company, using the Director's Loan "credit card" (instead of Amex or Visa or MC).  When the company reimburses you, simply treat that as you would any payment to a credit card.  Everything is correct, accounted for, and done.

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