A director working capital advance should be supported by evidence of the transfer and the intended funding arrangement. Record who provided the money and which company received it. Do not automatically call a cash injection revenue or share capital because it arrived in the company’s bank account.

Accounting records, calculator and glasses on a desk
Illustrative photograph by Cht Gsml.

Identify the actual transaction

Keep the transfer reference, date, amount, currency and payer details. Separate a direct cash advance from reimbursement of expenses already paid personally. Those transactions can require different supporting schedules even where they involve the same director.

Ask the director and responsible reviewer to clarify the intended terms. Record any agreement about repayment, interest or other conditions without inventing terms after the event.

Give the accountant a complete pack

Supply the funding evidence, genuine agreement and relevant corporate approvals. Have the accountant determine the proper ledger classification. If the intention is a share subscription or another capital arrangement, involve the secretary for the appropriate corporate process rather than relabelling a loan informally.

Track separate advances and repayments in a running schedule. Avoid offsetting unrelated personal expenses without supporting documents and approval.

Example: two directors transfer different amounts

The bank shows two receipts close together. Keep each funder’s balance traceable rather than crediting one general director account with no individual breakdown. A later repayment needs to be matched to the correct obligation.

Reconcile and confirm the balance

Compare the schedule with the bank and general ledger, and investigate unexplained differences. Obtain the appropriate review of the arrangement and any tax implications. The documentation pack should explain the funding history without treating a director’s verbal expectation as a completed corporate transaction.

Related practical guidance

For the surrounding records and responsibilities, see bookkeeping basics, company records to keep, bookkeeping and accounting.

Official guidance: IRAS official guidance.

Help with your company records

For accounting, bookkeeping and related compliance support, contact Raffles Corporate Services at [email protected] or WhatsApp +65 8501 7133. Tell us which records or process need attention so we can discuss the relevant next steps.