How to move a balance between out-of pocket expenses and a director’s loan account

This article explains how to transfer a balance from your out-of-pocket expenses to your director’s loan account in FreeAgent.

Please note that this article only applies to limited companies and you’ll need full (level 8) access to your FreeAgent account to follow the steps below.

If you’re a director and your expense account has an outstanding balance owed that would be better placed in your director’s loan account, you can move the balance by creating journal entries.

To do this, navigate to the 'Accounting' tab at the top of the screen and select 'Journal Entries' from the drop-down menu.

Select ‘Add New Journal Entries’ in the top-right.

Next, enter the following journal entries depending on whether you want to increase or decrease the balance in your expense account. If you’re unsure which journals are required, please ask your accountant.

Increase the balance in your expense account

• Debit code ‘907 - Director Loan Account’
• Credit code ‘905 - Expense Account’

Decrease the balance in your expense account

• Debit code ‘905 - Expense Account’
• Credit code ‘907 - Director Loan Account’

Once you’ve entered the relevant journals, select ‘Create Journals’ to complete the process.