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Thread: Member Loans and Salaries

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    Member Loans and Salaries

    Hi,

    I am getting my company books upto date and I am having a small (BIG) issue with member loans - it all seems very confusing (I am not an accountant)

    I use Quickbook Accountants Edition 8.0.
    I have created 2 loan accounts:

    Credit Card Loan (other current liability)- for all purchases from my credit card that needs to be paid back

    Members Loan Account (long term liability)- we use this to track all of our personal expenses that we put throught the company (naughty I know but we will get to drawing proper salaries soon)

    I want to know how do I capture the transaction to back-pay our "salaries" (below PAYE threshold) from our members loan?

    I tried to do a journal entry and tranfered monies from our "Member Loan" and Credited "Salries & Wages" but when I did a Profit & Loss and Trial Balance report - things just didn;t look right - so I deleted all those entries.

    Any cl;arity on this issue would be greatly appreciated;}

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    Quote Originally Posted by Jackieb View Post
    I want to know how do I capture the transaction to back-pay our "salaries" (below PAYE threshold) from our members loan?

    I tried to do a journal entry and tranfered monies from our "Member Loan" and Credited "Salries & Wages" but when I did a Profit & Loss and Trial Balance report - things just didn;t look right - so I deleted all those entries.

    Any cl;arity on this issue would be greatly appreciated;}
    Non accountants reply:

    I'm not exactly sure what you are trying to do. Do you want to now pay yourself a salary into your loan account as though you had been doing it for the last few months?

    In that case, journal will be: Debit Salaries, credit your loan account. I'm not a regular Quickbooks user so unfortunately don't know which exact menu instructions to provide you with.

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    Platinum Member sterne.law@gmail.com's Avatar
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    Correct, the original error is you crediting salaries.

    If you are using the journal -
    DEBIT - Salaries
    Credit - Loan Account

    Journal is the only method from an accounting perspective. Dont forget the UIF payment!!!(which you can do as a cheque payment which will be simpler than a journal. if you want to do journal then transaction is -
    Debit = Salaries Full amount(R6000)
    Credit - Loan person A (R3000)
    Credit - Loan person b (R3000)
    Debit - Payroll Burden:UIF (60) this is an expense account
    Debit - Loan person a (R30)
    Debit - Loan person b (R30)
    Credit - bank (R120)
    You can however do the journal and then save it. Therefore each month it can be automated or various options (Do a journakl entry, then before saving, GOTO edit, select memorize journal entry and follow the list)

    The transfer funds is for any form of bank accounts, eg. Cheque account to petty cash. Or Bank to credit card etc, etc.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Wink

    Jackie,is your surname Sele..

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    Site Caretaker Dave A's Avatar
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    Flaker, I don't think Jackie is talking about claiming personal expenses as expenses of the company
    The trouble with opportunity is it normally comes dressed up as work.

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    HI

    Thanks sterne.law@gmail.com - I am sure this will work out - I'll give it a bash and let you know. Just got confused as which account to debit and which to credit;}

    and no flaker my surname is not selebi - although turning corrupt looks like the way to go nowadays;}

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    Ok I have debited my salaries and credited each loan account (mine and husbands) that I just set those new loans up.

    I now presume I need to debit the main MEMBERS LOAN - and credit each one of our personal loans (which I captured our salries to)?

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    Sounds like you have a single "Members Loan Account" ledger where all the costs to date have gone. You now want to get rid of that account which includes all your private expenses which have been paid using the company's funds and instead split everything between the two members. Have I understood correctly?

    If yes, then you want to do the opposite: Credit the main members loan account (This will cancel out all the previous debits) and debit the individual loan accounts which will have the effect of reducing the credit you just made into them. This is essentially the result of your salary now being reduced by your private expenses.

    I hope I understood you correctly.

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    HI Thanks BusFact

    Thanks it all seems to be working fine now.

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    Members Loans captured wrnog

    Hi again,

    Thank for all the previous help.
    I have just discovered another rather disturbing mistake - that my previous acocunt didn't

    When I captured my personal expenses, I:

    Banking
    Write cheques
    Bank account - savings
    Pay - the vendor i.e. Pick n Pay
    Account - Members loan

    Now if I go to chart of accounts - members loan, all the payments reflect as a Decreased amount? This should be increased?

    Is there anyway to fix this easily? And exactly how do i capture these member loans - as a journal entry?

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