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D
DRGray
April 23, 2019
Question

Payroll Advances & Repayments

  • April 23, 2019
  • 1 reply
  • 0 views

I am using QuickBooks Online Essentials with Enhanced Payroll.

Can someone please help me to know the best way to handle employee advances & repayments?

Often the employees are written a check for say $200 in between payrolls and then pay it back on their next check. The employees are hourly if that matters.

 

1 reply

HoneyLynn_G
HoneyLynn_G
April 23, 2019

Hello there, @DRGray.

 

Thank you for choosing QuickBooks Online as your accounting and payroll partner. Let's work together in creating and setting up employee advances and repayments.

 

We can begin with setting up a cash advance repayment deduction:

  1. On the top menu, click the Gear icon.
  2. Choose Payroll Settings.
  3. Select the Deduction tab.
  4. Click Add A New Deduction/Contribution.
  5. On the Category dropdown, select Other deductions.
  6. Select Cash Advance Repayment for the Type.
  7. Enter a description and then click OK.

Next, assign the cash advance repayment deduction to your employees:

  1. From the left menu, go to the Workers tab.
  2. Under the Employee list, click the employee's name.
  3. Click the Edit (pencil) icon in the Pay section.
  4. Go to the Does *Employee name* have any deductions? section and click Add a new deduction.
  5. Select the Advance Repayment item.
  6. Enter $200 for the specific amount.
  7. Click OK to save the changes.
  8. Proceed with the other employee's profile and follow the same steps.

I also recommend seeking an accountant for an expert's advice to ensure there will be no problem with the books in the future. For additional reference, you can check this link: Set up cash advance repayment deduction.

 

That should automatically have the deduction item on the employee paycheck on the next payroll schedule.

 

Please let me know how it goes or if you have any follow-up questions about payroll. I'll be here if you need further assistance. Have a good one.

    J
    jessheegard
    January 10, 2020

    which account should the advance go to when you write the employee the draw check? The deduction in payroll falls under Repayment: Employee Advance. But when the check is written out it goes to an account that I created, called Employee Advance. Since QB created the repayment account for me in payroll, when it's being paid back to the company in payroll it's not hitting the same account. So now there are two accounts, one that's increasing when the payment is given to the employee and then another when the draw is being paid back to the company. Please advise. 

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