How would I apply a undeposited payroll cheque to the shareholders loan?

Hello @vynto ,

Since the payroll cheques are already part of your payroll record but simply not cashed, you can void the cheques and enter amounts to shareholder loan in the same adjusting JE.

The entry would be for the net amount of the pay cheque(s):

DR     Bank Account (in description enter VOID b/c cheque never cashed, or something like that)

CR     Shareholder Loan (similar to above)

If you know this is going to be a regular occurrence, you can create a Shareholder Loan payroll deduction item, entering the net amount of the pay cheque in it, resulting in a $0.00 paycheque to the owner(s) but automatically putting it to S/H Loan.  All your gross payroll and tax deductions will remain intact and be part of your payroll records; just the net amount will go to Shareholder Loan instead writing a cheque that won't get cashed.

Unfortunately, it will create a new account under Payroll Liabilities called Shareholder Loan.  I don't see any other way to connect it to the Shareholder Loan that you likely already have set up.  However, if you change the name of your original Shareholder Loan, you can then merge the old one with the one set up through payroll (making sure you keep the 2nd account!).  Then you can change it from being a sub-account of Payroll Liabilities and it will move to the regular Other Current Liabilities section of the Balance Sheet.  Now the payroll item Shareholder Loan should post each the net amount of each pay cheque to the Shareholder Loan account in your COA.

I haven't tested this, but it might be possible if you already have a Shareholder Loan account set up in your COA and you create a deduction payroll item with the same name, that it will automatically link to that account (if it is set up as an Other Current Liabilities type).  I didn't test that.  All I do know is that I didn't have a SH Loan account before in my COA, so when I set up the payroll deduction item, it created a new account, just not where I would want it on the Balance Sheet, thus the merging and moving around I suggested.

Good luck!