This article explains how to create a director’s loan account.
When you add a new user with the role of director, a director’s loan account is automatically created.
When you’re explaining a bank transaction, you can select which director the transaction relates to, from the ‘Payment to’ or ‘Received from’ drop-down menu. If you want to know more about how to enter money in and out, check out this article.
Once you’ve explained any bank transactions related to the company’s directors, FreeAgent will automatically make the necessary category entries (numbered 907). You can view these category entries either in the balance sheet or through creating a journal entry.
To view them in the balance sheet, navigate to the ‘Accounting’ tab at the top of your screen and choose ‘Reports’ from the drop-down menu.
In the ‘High Level’ section, choose ‘Balance Sheet’.
In the balance sheet, you can find director’s loan accounts listed as either Assets (where someone owes you money) or Liabilities (where you owe someone else money). To view the loan account simply select the director’s name, such as ‘Director Loan Account: Rufus Onslatt’ in the example below
You’ll see all the transactions (as well as the specific 907 category code) for that individual’s director’s loan account