Business expenses paid from director's personal account

[Nakwila]

Good evening folks,

Seeking your wisdom...How best can one account for business transactions paid from the directors' personal bank account.

The business would deposit cash into the director's personal bank account, thereafter the director would pay expenses e.g salaries from his account. Moreover, there is always excess money that he use for his personal needs.

I am using pastel partner ver19. A bit stuck on how to process these...kindly advise.

Thank you.

[Kevin Smith]

I would create a cashbook for him. When you deposit money into his account, receipt it in that cashbook. Pay the expenses out of that cashbook. That cashbook will keep a running balance of his income/expenses, and the excess should then be put to his loan account at month end.

[nkawit]

I am not a laywer and hold no degrees in anything financial or legal area.

For my company I pay a huge amount of invoices from my personal credit card, every invoice paid requires the invoice to be in the business name and proof of payment to be attached to my "claim".

On our accounts system my directors loan account is used to track what I've paid for.

Never had an issue with yearly audits on our books, nor did SARS raise any issue during an audit into my income.

[Nakwila]

Thank you very much folks for your advise, all coming to the same thing...much appreciated.

I managed to get the director's private bank statements' and analysed the business expenses paid from the cash deposits. Thus processed, cash receipt journal for the cash deposited by the business against the respective expense accounts...the difference debited to his loan account.