Track Employee Debt Repayments

Kat001
Kat001 Member Posts: 2

Is there any way to track how much is paid off a debt garnished from wages? We have received a letter asking us to garnish an employee's wage with a weekly deduction. The debt will take years to repay. I was wondering if there is a way that I can enter the total amount of the debt somewhere as a limit and be able to track repayments in a report with the amounts deducted from the total leaving an outstanding balance.

Comments

  • Kris_Williams
    Kris_Williams Member Posts: 2,564 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert

    I would enter the original debt as a Loan to employee (make it an asset account), and every week when the amount is deducted allocate it to the same account. You can then do a fast report on that account and see the original debit and all the payments, and also the balance

  • Kat001
    Kat001 Member Posts: 2

    Thank you Kris_Willams :)

  • Bruce
    Bruce Member Posts: 401 ✭✭✭
    edited November 23

    @Kris_Williams - Whilst the approach you have recommended does meet @Kat001 's objective of showing the amount outstanding, I would be reluctant to use it. Treating the amount to be garnished as Loan to the employee and an asset is misleading as it is not an asset of the Company and in my opinion should not appear on the balance sheet.

    My suggestion would be to:

    • treat the weekly amount deducted as a payroll item
    • using the "to do list" set up a periodic reminder to check the total amount deducted via the payroll item and compare it against the original amount due.
  • Acctd4
    Acctd4 Accredited Partner Posts: 2,086 Reckon Accounts Hosted Expert Reckon Accounts Hosted Expert
    edited November 23

    Using a Payroll Item was Kris’s suggestion. It still has to be mapped to an account though so what account would you link it to Bruce ? 🤔

    I think one would need to determine the correct account type based on what the debt is actually for as - if the employer needs to on-pay it - it sounds more like it may need to be a Payroll Liability account (which should definitely show as a liability on the balance sheet) 😬

    Shaz Hughes Dip(Fin) ACQ NSW, MICB

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  • Bruce
    Bruce Member Posts: 401 ✭✭✭

    @Acctd4 , Shaz

    I didn't explain myself properly. My issue with with Kris' suggestion was allocating the garnished amount to an asset account. Most definitely, it should be posted to a Payroll Liability account.