Employee Advance

                Sometimes employees have to go outside for company's work and company pays some amount for their expenses in advance. This is when an advance is created against the employee for him/her to use it for the expenses and clear the advance against bills later.

How to create an Employee Advance?

1. Go to Payroll  > Employee Advance
2. Select the Employee to whom you have to give the advance.
3. Enter the Amount and the Reason.
4. Select Pay From   “Employee Advance” Expense account and the payment method
5. You can choose the customer Job against which the employee is paid the advance
6. Click on ADD to create the transaction.

Once the transaction is created and approved, there is a ledger posting entry created for the same.

How to claim expenses against Employee advance?

1. Go to   Expenses > Employee Claim >create New
2. Select the employee name who wants to claim expenses against the advance
3. Select Pay from “ Employee Advance “ Account
4. Select the appropriate expense
5. The drop down list from “employee Advance” box will list the employee advances the employee has received. Select the appropriate advance against which the bill is claimed.
6. Add the expense items in the Add items table and enter the amount accordingly
7. Click ADD to create the transaction.

When an employee expense is claimed against an employee advance, there could be three scenarios

1. When the entire employee advance amount is claimed
2. When the amount claimed is in excess of the advance given
3. When the amount claimed is less than the advance given

When the entire employee Advance amount is claimed, in the Employee claim transaction, the remaining balance of the Employee advance shows as “0” which means the entire employee advance has been claimed as in the screen shot below.

And if you check the particular employee advance transaction, the ‘recovered amount’ shows the amount that has been claimed against the advance and the ‘pending recovery’ field is set to NO since the entire amount is recovered.

When the amount claimed is less than the the advance given, as in the screenshot below the employee advance column would show the remaining amount from the employee advance available for use.

In the particular employee advance transaction, the recovered amount is shown as ‘550’ which is the amount claimed and the pending for recovery field is set to YES denoting that there is still amount that is pending for recovery from the employee advance given.

The employee can claim against the remaining advance in future claims.

When the amount claimed is in excess of the advance given, in the employee claim the transaction would be created with the same amount entered and the excess amount will be created as a negative balance against the employee which will be tallied against future Employee Advances given to him.

As in the below screen shot, the excess amount claimed 650  is allowed to be created as a transaction

And when a new Employee Advance transaction is created for that employee, the negative balance is adjusted in the new transaction.

In the below screen shot, the earlier employee claim for the same employee had  in excess to the available advance at the time of the claim. Now when the employee advance is created for the same employee, the negative balance of 650 is adjusted against the current advance created.