Directors' loan accounts
A director's loan account is the running account between a company and one of its directors: money the director puts into the business, money the business pays out on their behalf, expenses they claim back, and anything else that leaves one owing the other. In Sales Scribe it is an ordinary ledger account with one extra fact recorded against it — who holds it.
The same idea has different names depending on how your business is set up, and Sales Scribe uses the right one:
| Your organisation is a… | The account is called a… |
|---|---|
| Limited company (and most other forms) | Director's Loan |
| Limited liability partnership | Member's Loan |
| Partnership | Partner's Current Account |
| Sole trader | Person Running Account |
Everything in this article applies to all of them; "director's loan account" is used throughout for readability.
Sole traders. The proprietor and the business are the same legal person, so there is no office to hold and no suffix to add. The account is still available and works the same way — it is simply named neutrally, and the prompts described in When an officer resigns never appear.
Before you begin
- The person must already be on your officer register.
- You need the Manage chart of accounts permission to create, adopt or archive a running account, and View chart of accounts to see the balance on their page.
- Seeing the statement additionally needs View financial reports, because it lists ledger movements.
Create a running account
- Go to Settings → Directors & officers and open the person.
- In the Running account card, choose Create running account.
That is all. The account appears in your chart of accounts with its own code and is immediately available as a category on Spend Money, Receive Money and manual journals.
Accounts are created when they are first needed, not added to every company's chart in advance — a business with no director's loans never sees one. There is one account per person, for life: it is not closed and re-created when the balance swings from one side to the other.
Or adopt an account you already keep
If you have been running a director's loan account of your own — from a migration, or an account you set up by hand — you do not have to start again. Under the Create running account button, pick it from Existing account and choose adopt.
Its code, balance and history are kept exactly as they are. Only two things change: the account is now marked as held by that person, and its label gains their name. Its accounting type is never altered, because your reports take the sign of every figure from that type — an asset-shaped director's loan and a liability-shaped one both work, and both keep the shape they had.
How the account is named
The stored account name does not contain the person's name; the full label is composed wherever it is shown. That is what stops an ex-director's name being frozen into a ledger account forever, and it is why every picker, report and statement shows the same wording.
You will see labels like:
- Director's Loan – Jane Smith — she is a serving director.
- Director's Loan – George Smith (former director) — he has resigned; see When an officer resigns.
- Director's Loan – Alan Reed (appointment begins 1 Oct 2026) — the transaction was recorded before the appointment was.
- Person Running Account – Chris Doyle (no director appointment recorded) — nobody has recorded a directorship for them at all. The neutral wording is deliberate: calling it a director's loan and then saying no directorship exists would assert and deny the same thing in one line.
Which way the balance points
The Running account card on the person's page says it in words rather than leaving you to read a sign:
- owed to the person — the account is in credit. They have put money in, or the company owes them expenses.
- owed by the person — the account is overdrawn. The company has paid out more on their behalf than they have put in.
It is the same account either way; nothing is moved or re-created when it swings. The card also tells you the date its history is complete from, so you know how far back the figures can actually be read.
A balance owed by a person may become relevant to the s455 or beneficial-loan rules depending on the circumstances. Sales Scribe does not determine that — it does not hold the close-company, participator or employment facts those rules turn on. Ask your accountant.
Archive a running account
Use Archive account on the person's page when the account is finished with. Archiving requires a nil balance — it must not hide a figure your accounts have to show. Reopen account brings it back.
Archiving the account does not remove the person: they stay on the officer register with their appointment history.