Reply to: Payment made to wrong account

[NotAllThere]

And I think we can consider this thread closed.

[unixman]

To be serious OP, it definitely has to go "through the books". Don't even think about appropriating 5k from your company unrecorded(!). Ask the accountant what to describe it as. Then shove it in the spreadsheet or whatever.

Just stepping back a moment, the whole thing sounds a bit shady. If you are operating in such a way that your Co finances and you own can become confused in the order of 5k, perhaps you are not being as financially hygenic as you oughta'.

[unixman]

Let me ring your accountant. I'll post their reply when I get through to them.

Actual lol. In an open plan office.

Add it to the NLUK comment generator immediately.

[Snarf]

There's nothing to deal with at the year end. It doesn't affect the balance sheet either way.

I didn't say how he would deal with it...
Ignoring it is a way of him dealing with it!

I give him bank statements and a separate ss detailing any cash withdrawals or strange transactions that need additional explanation.

[VectraMan]

I'd just transfer it out, note it on whatever spreadsheet/system you use to keep track and let the accountant deal with it at year end.

There's nothing to deal with at the year end. It doesn't affect the balance sheet either way.

[Snarf]

Thanks. I'm too lazy to do that.


(well, I thought I'd ask here in case anyone had an answer that was helpful)

Good luck with that!

I'd just transfer it out, note it on whatever spreadsheet/system you use to keep track and let the accountant deal with it at year end.
I had similar when I started trading... First invoice had to be paid to me personally because co account wasnt ready - all sorted with accountant.
However the client failed to change the account for the next 2 invoices after the account was set up... Just noted it on a ss and sent it to accountant at year end.

[VectraMan]

If it's your money paid in error into the wrong account then you could just pay it back to the payer and then ask them to pay it into the right place, which would be a little pointless, or just transfer it yourself, perhaps keeping some kind of evidence just in case anybody ever looks at your bank statements. It's your money, not the company's, so any talk of putting it through the books is ridiculous.

Whether it's actually the business' money or your personal money is a different question.

[TheCyclingProgrammer]

If the money has nothing to do with your business, record it as a loan to YourCo (credit the director's loan account) and then simply withdraw the money and show the payment as from the DLA.

If the money was intended for you and you have evidence that the money was intended for you, then I can't think of any reason why you'd put this down as company income and then withdraw it as a potentially taxable expense payment.

If the money should have been paid to YourCo then yes, you'll need to claim it as an expense if you've been making payments on behalf of the company.

[WTFH]

Ok, that makes sense, it's expenses incurred (even if it was via a legal action) and it's sensible to draw that money down as personal expenses with the appropriate entry in your books.

Thanks. That's how I'll handle it.


As a background, I paid it initially out of my personal account because my solicitor felt the issue would be resolved with one letter (at a cost of around £200, which I would have been happy to forget about in the grand scheme of things). That was over a year ago, and I just kept paying out of my personal account as the bills continued to come in.

[ChimpMaster]

Why complicate matters? Just move the money into your personal account and note it as an error. It's not like you raised an invoice for payment so it's not a sales payment.

You can probably even claim interest from your company for having loaned it personal funds for those few days

[TykeMerc]

No, in relation to solicitors fees. I paid my solicitor out of my personal account, the defendant has now paid my costs into my business account.


But I guess I could expense them, since it was relating to an expense incurred by my business because to the defendant.

Ok, that makes sense, it's expenses incurred (even if it was via a legal action) and it's sensible to draw that money down as personal expenses with the appropriate entry in your books.

[NotAllThere]

Well I spoke to them and they advised instead of speaking to the professional you pay to help you with this go get free advice from a bunch of strangers. Then they put the phone down laughing.

HTH.

Funnily enough this site exists precisely so that people can get free advice from a bunch of (possibly unqualified) strangers, so your post isn't exactly helpful and is, in my view, overly aggressive.

In this case, the free advice is: no you must put it through your books. Talk to your accountant how best to do this.

[northernladuk]

Thanks. I'm too lazy to do that.


(well, I thought I'd ask here in case anyone had an answer that was helpful)

Well I spoke to them and they advised instead of speaking to the professional you pay to help you with this go get free advice from a bunch of strangers. Then they put the phone down laughing.

HTH.

[WTFH]

Was the payments in relation to expenses you incurred (mileage etc)?

If so you must put this down as sales for the company, and you should also claim for the expenses through your Ltd company. The two transactions will offset and you will be owed the expenses back from your company.

No, in relation to solicitors fees. I paid my solicitor out of my personal account, the defendant has now paid my costs into my business account.


But I guess I could expense them, since it was relating to an expense incurred by my business because to the defendant.

[TykeMerc]

The obvious approach is to repay the money and get it paid to the correct account.

It does beg the question as to why money that's owed to you personally would be paid to YourCo Ltd's account? Is the money owed due to expenses or a loan? It makes little sense that someone that owes it to you personally would have your business banking details.