How to record monies owed to me by my new startup? (bookkeeping question)

I have recently started a startup.

I am totally bootstrapping the startup, and so costs are being kept to a minimum. There is no way the company can afford to pay me my normal (or even 'discounted') consultancy rates - at the moment.

What I have decided to do therefore, is to "bill" the company on a weekly basis - reflecting the number of hours I worked on the project. The expense falls into two categories:

• Capital expenditure
• Consultancy fee

I want to defer these payments (by the company to me), until the company becomes cash positive, and then start paying off the amount owed back to myself, over time.

Can anyone provide any guidelines on how to record these transactions?

Some relevant background info:

I am based in the UK, and the startup is a limited company, and is NOT VAT registered.

As in the previous response, I would not recommend that you record a salary until you can get paid that salary in real time. As for other costs that you have paid out of pocket but need to be reimbursed, I recommend you create an employee reimbursement form and list out all out of pocket costs including mileage from the use of your personal car for business purposes. At the end of each month you would fill out the form and record in your accounting books the expense item (e.g. office supplies) and create a liability account "Owner's Payable" to capture all of the out of pocket expenses over time. I am not sure of the depth of your accounting knowledge, but for example:

Debit $100 Office Supplies (to record the expense)
Credit $100 Owner's Payable (to record the amount owed to you)

You do this each month and then when you do earn money from your business you can pay yourself back by recording the following:

Debit $100 Owner's Payable (reducing the liability)
Credit $100 Cash (pay out to you)

Hope this helps.

What I would do (FYI: I am not an accountant)

• capital expenditure (I presume you are referring to items you have bought for the company) - submit expense claims to the value
• consultancy fee
  • if you are a director, it's tricky and would need to speak to an accountant to be sure but I suspect your best bet is do nothing and pay yourself through conventional PAYE/Dividends once the company is profitable
  • if you are a self employed entity outside of the business, submit invoices for the work and you become a creditor to the business

Normally it deducted as a director's pay or add another name in the payroll. However this will reflect in P&L and other accounting statements and decrease the profit. Which may show that your company is not that profitable if you are looking for a loans or investments. Deferring the pay is another choice but that needlessly complicates things on the accounting side.

What you can do is, mark a salary for your self and increment it in a separate document say an excel sheet. When your company is up and running and generating sufficient income, you can deduct it as director's pay or through payroll either in lump sum or in installments.