We are often asked how to process personally incurred business expenses through a Pandle account. The answer to this depends on what kind of business you have.

Limited Companies, and recording Director's Loan Accounts in Pandle

When you set up your company in Pandle, you will enter (or Pandle will automatically pull the information from Companies House) the names of each company director.

Pandle then uses this information to create a Director's Loan Account for each director. 

This account works in the same way as a bank account, and it's available from the Banking screen in Pandle, but is used to show how much the company owes to (or is owed from) the director.

Select 'Banking' in the navigation menu, and then 'Bank Accounts'.

Select your Director's Loan Account from the list and click the 'Enter Transactions' button next to it.

In our example we're entering a transaction for an electricity bill relating to the business, which one of the company directors paid for personally.

The expense will reduce the profit, and the balance of the Director's Loan Account will automatically update.

You can also use Bank Imports to enter transactions in your Director's Loan Account.

Select the ‘Entry Method’ next to the relevant account, and then select the new entry method from the dropdown menu.

Our guide to Bank Imports in Pandle explains how to use this entry method in more detail.

Sole Traders/Partnerships

With a sole trader or partnership the process is slightly different. Let's take the example of a sole trader paying for an electricity bill of £200 + VAT on behalf of the business, i.e., it is paid through their personal bank account which is not included in Pandle.

Select 'Banking' in the navigation menu, and then 'Bank Accounts'.

Click on 'Enter Transactions' for the cash account. Process the expense payment out in one transaction, with another transaction showing the same amount coming in (on the same date) categorised under 'Capital Introduced'.

As you can see from the image, the net effect is zero, meaning the cash account balance will not change. The electricity expense will be included in Pandle and £240 will show as introduced from the owner/partner.

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