Is Employee Advance check supposed to show up on my P&L as expense? On P&L, the emp. gross pay is listed & so is advance check.

For example: An employee was paid an advance of $500 mid pay period (a written check), and when the employee received his paycheck at the end of the pay period, the advance was deducted.
Both the gross paycheck total & the advance check of $500 show up on the Profit & Loss, making it seem like employee was paid $500 more than he actually was.
Did I set this up incorrectly?

Answer

Nothing here is Expense; it is cash flow as Expenditure.

The check to give them the loan is posted on the expenses tab as Other Current Asset = Employee Loan. It's not an expense; you didn't get anything for your expenditure. There is no Business Purchase involved, here.

Now they repay by cash, check or Payroll deduction.

The Gross Pay is always expense. Their Takehome is reduced by the net pay deduction. Edit your deduction item; where it wants to link to a Liability account, it links to that same Other Current Asset account as internal repayment of the loaned amount. If you had to Fix that account link, then at the step of Save, QB offers to move the existing data for you. Let it.

Was this answer helpful? Yes No
Original
AllStar

No answers have been posted

More Actions

People come to QuickBooks Learn & Support for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

  1. Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
  2. Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
  3. Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
  4. Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
  5. Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.

Select a file to attach:

Qb community
Looking for advice from other business owners?

Visit our QuickBooks Community site.