Employee Cash Advance

Thanks for checking in with us. A cash advance is a loan by a company to an employee, Bargainbabelv.

This is why it will show a negative amount on the expense account in the Profit and Loss statement. To properly record the petty cash advance, we'll have to create a deduction item to track the repayment. It will be deducted from the employee's paycheck automatically. Let me show you how:

1. Go to Lists, then choose Payroll Item List.
2. Click Payroll Item, then select New.
3. Click Custom Setup, then click Next.
4. Select Deduction, then Next.
5. Enter a desired name, then Next.
6. Choose the liability account, then click Next.
7. Select the Tax tracking type, then click Next until you're in the Calculate based on quantity window.
8. Hit Neither, then click Next.
9. Select whether to calculate gross pay or net pay, then Next.
10. Enter a default rate or limit, then press Finish.

Once done, add it to the employee's profile. This way, it will calculate on the paycheck automatically. Here's how:

1. Go to Employees, then Employee Center.
2. Choose the employee, then double-click to open their profile.
3. Go to the Payroll Info tab.
4. Under ADDITIONS, DEDUCTIONS, AND COMPANY CONTRIBUTIONS, add the deduction payroll item.
5. Add the amount that'll be deducted from every paycheck and a limit.
6. Press OK.

When creating a paycheck, the amount will be deducted. You'll have to open a quick report to verify it. Let me guide you on how:

1. Click Lists.
2. Go to Chart of Accounts.
3. Select the employee advance account.
4. Right-click, then choose QuickReport.

You can check out this article for more details on how to pay an advance to your employees in QuickBooks Desktop Payroll: Set up and repay employee advances.

If there's anything else that I can help you with aside from understanding employee cash advances, please let me know in the comments below. I'll be here ready to lend a helping hand. Have a good one.