What is current account? Meaning and explanation

A current account records all amounts one party pays or receives on behalf of the other. If a director-major shareholder (DGA) pays a business invoice privately, they have a receivable from the company. If they withdraw money or the company pays private expenses, a debt to the company arises. The balance shows at any moment who owes whom. Holding and operating companies also often keep a current account between them.

For a firm, the current account with the director is a recurring point of attention at year-end. Private expenses paid from the business account must be classified correctly, or they end up in costs and VAT is deducted wrongly. A growing balance also has tax consequences; for example, the part of the debts of the director and their tax partner to their own company above 500,000 euros is taxed in box 2 under the Dutch Excessive Borrowing from Own Company Act. Agreements on interest and repayment should be recorded in writing.

In Autoboeker, a bank transaction that cannot be explained automatically becomes a client question, so a private expense does not end up in costs unnoticed. With administration rules you record how your firm books certain types of payments for a specific client. Bank matching is available for Exact Online, Twinfield and SnelStart.