Why is my Directors Loan Account overdrawn?

Or to put it another way, how come I owe my company money?

This arises when a Director takes more from their company than they have their company owes them.

This could be through the Director transfering company money to their personal bank account or using company money to pay for personal expenditure.

Bear in mind that salary run through PAYE for Directors will set up an amount owed in wages and Dividends Voted will set up an amount owed in Dividends Payable (often to the Director).

The full picture of how the Directors Loan Account has ended up overdrawn will be found by looking at all the transactions that have been recorded to that account.