How to account for a pay advance to an employee?
The following steps will guide you through setting up Cashbook for recording pay advances.
Step 1. Create an Asset account
Step 2. Create an Advances in Pay account
This account will be used when you pay an advance on the employee's pay/wages.
Step 3. Create an Advance Repayment account
This account will be use to withhold the advance from the employee's future pay.
Step 4. Create an Advance Repayment deduction in Payroll
This deduction will be used to record the repayment of an advance in the employee's wages
A shearer Daniel Brown does not get paid until the end of the week but he has asked his employer for an advance in his wages of $200.
Step 1: Recording an advance in pay
Step 2. Deducting the advance from a wage payment