Lending Money to my Limited Company

[simons]

Thanks to me missing the small print on a contract which said that my agency must receive timesheets within 45 days of work being completed, I'm now having to wait an extra few weeks for payment of an invoice (until they get paid by the client).
Meanwhile, I have a tax bill due next week and I'm ~£400 short in the business account. Rather than getting an overdraft, I'd like to personally lend this to the business until my invoice is paid.

Is this as simple as transferring the funds from my personal account to the business account then transferring it back at a later date? Or is there some obscure accounting ritual that I should go through?

Thanks in advance!

[hiteshg]

Thanks to me missing the small print on a contract which said that my agency must receive timesheets within 45 days of work being completed, I'm now having to wait an extra few weeks for payment of an invoice (until they get paid by the client).
Meanwhile, I have a tax bill due next week and I'm ~£400 short in the business account. Rather than getting an overdraft, I'd like to personally lend this to the business until my invoice is paid.

Is this as simple as transferring the funds from my personal account to the business account then transferring it back at a later date? Or is there some obscure accounting ritual that I should go through?

Thanks in advance!

I think this should be normal. There is an option for 'Directors loan acount' not sure if thats the correct wording. But for sure you can lend it to your company. Explore more.

[Archangel]

Nothing odd about this (this is actually what a directors loan account was designed for, not borrowing money from the company!).

Just transfer the cash fron personal to company, then back at a later date. Note the transfers in your books as to/from directors' loan account.

If the loan is outstanding at year end, an entry is made in the accounts along the lines of "directors loan account is interest free".

[hiteshg]

Nothing odd about this (this is actually what a directors loan account was designed for, not borrowing money from the company!).

Just transfer the cash fron personal to company, then back at a later date. Note the transfers in your books as to/from directors' loan account.

If the loan is outstanding at year end, an entry is made in the accounts along the lines of "directors loan account is interest free".

But how can some one get it otherwise. If he has already spent money for company in personal account. Does he need to claim them as business expenses ?

[Not So Wise]

Thanks to me missing the small print on a contract which said that my agency must receive timesheets within 45 days of work being completed,

*seriously wonders about some people*

[RichardCranium]

Thanks to me missing the small print on a contract which said that my agency must receive timesheets within 45 days of work being completed, I'm now having to wait an extra few weeks for payment of an invoice (until they get paid by the client).

Agents DO go bust.

And they are more likely to do so around now than in previous years.

You giving them interest-free loans, however, helps prevent that.

So that's nice of you. Helping prop up the economy for the rest of us. Well done!

[Menelaus]

Instead of lending money to the company, couldn't you just issue shares?

[PhilAtBFCA]

Lending money to your company

hiteshg

If you pay for something that is an expense for the company, the company will owe you money.

This can be accounted for either in an "expense account" or as a directors loan account.

If the business bank account needs money you can transfer money into it from your personal bank account, this can be a loan from you to the company, which the company can repay at a later stage.

The company could pay you interest, but that probably is unnecessary and makes things more complicated for no real benefit.

Phil