How to do Employee Advance Payments?

There are many reasons on why an Employee Advance Payments will happen. An Employee can take an advance money for

1. Personal reasons – Marriage or some other emergencies
2. Local travel and others – For business trips like Sales and Marketing guys
3. Buy Raw materials for the business etc – Purchase team that procures the materials and then submit the Invoices to settle the money

So booking of an Accounting entries are different as the Employees do take advances and then it has to be adjusted against the salary amount or Receive an Expense sheets or document of purchases.

Step-1: Create a Supplier as “Employee Advances” in “SUPPLIER MASTER”.

Step-2: In the ACCOUNTS Section of the “SUPPLIER MASTER”, change the ADVANCE ACCOUNT to the specific “EMPLOYEE ADVANCE ACCOUNT”.

This helps Accountants to manage the ADVANCE money that’s paid to each Employees and recover from them.

Step-3: Now from EAP menu, when you select this SUPPLIER, the ADVANCE account will be accurate. Now pay the advance money.

Step-4: Now create a SERVICE Purchase Order Receipt (POR) so that we can capture where the expenses are booked by an EMPLOYEE

Step-5: In the NAME field “enter the employee name” for tracking purpose.

Step-6:  This transaction would ACCRUE the balance amount against the EMPLOYEE to pay.

Step-7: Now go to PAYMENT’s MENU and reconcile the Goods receipt transactions (Purchase receipt) and Advance payments

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