Accounting for out of pocket employee/director expenses in Sage Accounting Start

techguy

Hello there,

The context is that things are still in the startup phase of my company and I have not yet setup a bank account - with this in mind, I have incurred various expenses out of my pocket, which I would like to account for in Sage under the company, and when cash is available down the road reimburse myself.

I have read online that the best way to do this is to create a "fictitious" bank account and record all my individual expenses in there, as "money" out. Then later on when I take money out of the real bank account, I can balance it off against the fictitious account.

It seems totally janky, but I've seen it recommended in a number of places. I can't seem to figure out another way to do it?

Thank you

Madd002

https://www.boards.ie/discussion/2058343694/accounting-for-out-of-pocket-employee-director-expenses-in-sage-accounting-start

Would you not set up a supplier called Petty Cash where you can still record your expenses ie your VAT receipts ie Petrol/Diesel/Printer ink post these into correct nominals ie Fuel costs etc. & then pay yourself when money comes into business. Input monthly so their in by the time you do VAT return. That's my take on it.

SureYWouldntYa

The easiest treatment here is a journal debiting the appropriate expense code (motor expenses, company formation etc.) and offset against the directors loan account

Then down the line when the company bank account is set up and there is funds in place you then withdraw the money and offset that against the directors loan account, obviously ensuring not to withdraw too much as there can be issues with an overdrawn directors loan account

You can continue to do the same even when the company bank account is set if you end up paying privately for expenses of the company

ebbsy

Correct.