Directors Loan account – Things you need to know.
To get a loan from your firm, you must have the position of director, as the term implies. In layman’s terms, the Directors Loan Account is a financial account on the business’s books that records all transactions between the director and the firm. If the company owes funds to the director, you have to record it as a creditor in the business’s accounts. Whereas, if the director owes money to the company, you have to record it as a debtor.