Setup an employee loan outside of Payroll

Lorri Neal
Lorri Neal Member Posts: 19 Reckoner Reckoner
in Reckon Accounts (Desktop)

We have paid a supplier bill on behalf of an employee. The employee has chosen to pay the loan back directly to the business bank account rather than from his wages as he will be paying back different amounts each week, depending on the overtime he has worked.

I created a chq to the supplier and used the 'Employee Advances' account as the account. I'm not sure this is correct as the amount comes up ex GST in 'Employee Advances'

Is there another way I should have done this?

Thanks

Best Answer

  • Kris_Williams
    Kris_Williams Member Posts: 4,184 Reckon Hall of Famer Reckon Hall of Famer
    Answer ✓

    you don’t enter a tax code, it’s not your expense or GST to claim back, the account you used is ok but yes you could have used a loan account too.
    if you want you can call me

    0415940843

Answers

  • Kris_Williams
    Kris_Williams Member Posts: 4,184 Reckon Hall of Famer Reckon Hall of Famer

    What you’ve done sounds fine. The figure will not have a tax code, and I would use something like Contra or Clearing account. I think employee advances would be fine too - just no tax code.

    When he repays just go to banking and make the deposit to the same account

  • Lorri Neal
    Lorri Neal Member Posts: 19 Reckoner Reckoner

    Thanks Kris,

    My concern is the amount he pays back will be more than what's in the Employee Advances account as he will be paying back the GST incl amount.

    I'm not sure what you mean by use the Clearing Account-where in the transaction do I need to use this?

  • Kris_Williams
    Kris_Williams Member Posts: 4,184 Reckon Hall of Famer Reckon Hall of Famer

    employee advances should have the total that you paid on his behalf, and it would not be entered with a tax code, regardless of whether it has GST he will owe the entire amount. Did you just enter it a cheque to a supplier to the account of employee advances with no tax code?

  • Lorri Neal
    Lorri Neal Member Posts: 19 Reckoner Reckoner

    I entered it with a Tax Code as it was paid to a supplier. I thought maybe I should have used the Fees & Charges expense account (as that is what it was for), then created the loan separately?

  • Lorri Neal
    Lorri Neal Member Posts: 19 Reckoner Reckoner

    I think I've got it now.

    Thanks very much for your help

  • Kris_Williams
    Kris_Williams Member Posts: 4,184 Reckon Hall of Famer Reckon Hall of Famer

    You’re very welcome …

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