Salary advances and how payroll recovers them
You will be able to: Post a salary advance in cash or bank; Set a recovery plan and predict each month's deduction; Find open advance balances.
- Read not done yet
- Self-check: not taken not done yet
- Lesson complete not done yet
An advance is money given to an employee before it is earned. Employees ▸ Advances is the register. Press + New Advance to give one. There is no draft: Post Advance posts a journal at once and there is no edit or delete afterwards, so check the figures first.
What posts
One journal on the Date you chose: Dr Employee Advances (1460) for the Amount; Cr Cash in Hand (1000) when Paid Via is Cash, or the ledger account of the chosen bank account when Paid Via is Bank. The register shows a Balance equal to the Amount. No VAT or stock is involved.
The recovery plan
| Field | Meaning |
|---|---|
| Recovery Start | First payroll month that takes money back; earlier payrolls do not recover it |
| Monthly Recovery | Amount taken each month. If empty, Amount ÷ Installments, or the whole Amount if Installments is also empty |
| Installments | Number of months, used only to work out Monthly Recovery when that is empty |
How it is recovered
- Post the advance with a recovery plan.
- On Payroll Run press Calculate. The Deductions column shows the recovery and Net falls by that amount.
- Press Approve Payroll. This credits 1460 and lowers the advance Balance, oldest advance first.
- A payslip calculated before the advance was posted does not change; press Calculate again to include it.
- Payroll never takes back more than the person earns that month. The rest waits for the next payroll.
- The Open Balance tile and the Employee Advance Balances report show what staff still owe; a fully recovered advance drops off the report.
Try it in the demo
- Open Employees ▸ Advances in the demo and read the Issued, Open Balance and Employees tiles.
- Find the Recovery and Monthly columns for an advance, and work out how many months remain.
- Open the New Advance form and read the Recovery Start field (do not post on shared demo data).
Public demo company, sign in as admin / demoAdmin123. Data refreshes nightly.
- Post Advance: Dr 1460, Cr Cash in Hand 1000 or the bank ledger account.
- Recovery is taken when payroll is approved, from the Recovery Start month.
- Monthly Recovery or Installments set the instalment; the last month takes the remainder.
- No edit or delete: check before posting.
Check yourself
5 questions on this lesson. Not timed, not the exam, and you can try again. Score 60% or more, and read the lesson, to complete it.