• From: USA, TX, Houston
  • Registered: 06/05/2013
  • Posts: 46

Topic: How to properly track cash advances from employees

Ok, here is my question.  I have a client who takes out cash advances every week.  How do I enter them into FA?  Right now the way it is on his settlement statements that he gets they are shown as a deduction with the rest of his expenses.

When I enter the settlement statements into FA I just was creating an item called advances in the expense category but now that I think about it I need to set it up differently because it isn't an expense it's a draw on future earnings.  Thanks for all your help in figuring out how to set this up correctly in FA.

2 Reply by apmuthu (edited by apmuthu 07/26/2016 02:08:55 am)

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,089

Re: How to properly track cash advances from employees

Entry as "Loans provided" with appropriate journal entries when an earning is credited.

apmuthu's Website

  • From: USA, TX, Houston
  • Registered: 06/05/2013
  • Posts: 46

Re: How to properly track cash advances from employees

apmuthu wrote:

Entry as "Loans provided" with appropriate journal entries when an earning is credited.

Can you explain with a little more detail?  Right the way I was entering it was under supplier invoices and created an Item called advances, but that put it into an expense category which I now realized was wrong.  But how would I make entering the advance easy so it does't take him multiple steps once I finish setting him up on the program?

I guess a little more clarification would help, he runs a trucking company where he receives a weekly settlement statement from the carrier he is contracted with.  It shows all of the revenue for loads he ran that week in one section and then shows all of the deductions like fuel, advances, insurance, etc. in a deductions section.  That's why I really didn't think anything of it while I as entering his statements in the other night and then the next morning I realized that the P&L statement didn't look right and that's when I realized I messed up on his advances.

  • From: USA, TX, Houston
  • Registered: 06/05/2013
  • Posts: 46

Re: How to properly track cash advances from employees

Nevermind, I think I just answered my own question.  I just need to set the cogs account for that item as my revenue clearing account that I use to put the revenue from the settlement statements in and make the payments for expenses or deductions from the settlement statements before I show the account transfer in FA to show what the real number was that was direct deposited into the bank account.

  • From: USA, TX, Houston
  • Registered: 06/05/2013
  • Posts: 46

Re: How to properly track cash advances from employees

Ok, well I thought I had it figured out but I don't think I do.  I tried running a couple tests with the way I described above and I think it just made a bigger mess of things.  So apmuthu, if you could explain to me what the entry process would be in FA to make it track correctly I would greatly appreciate it.

  • From: Singapore, India, Chennai
  • Registered: 05/02/2009
  • Posts: 6,089

Re: How to properly track cash advances from employees

1. Open a "Bank" Account for the client.
2. Whenever the client is given an advance, treat it as if money was deposited into the above "Bank" Account.
3. During settlement, allocate from the said "Bank" Account.

apmuthu's Website