Problem

The user has bought something for an employee, and the employee will pay for it later.

They may call this a reimbursement, but it is not the same as an employee purchase being reimbursed by the employer.

Diagnosis

There are two basic ways to think of this transaction, in Goldenseal payroll software:

• As a purchase and a sale to the employee.
• As an advance to the employee.

Solution-- as Purchase and Sale

If you want to keep track of the item purchased, then the best way to handle this transaction is to enter it as a regular material purchase, and then as a sale to the employee.

To enter the purchase, follow these steps:

1. Choose Purchases from the Costs menu.
2. Click the New button.
3. Enter details for the purchase (just as if you were buying it for your own business).

To enter the sale, follow these steps:

1. Set up a Customer account for the employee. HINT-- you can make a single one-time name account, and use it for all employees.
2. Choose Sales from the Income menu.
3. Click the New button, and enter a sale to the employee for the item you bought for them.
4. When the employee pays you for the item, use the Deposit Funds command to enter their payment.

NOTE-- This method will not let you deduct the repayment directly from a paycheck. But it does give you detailed tracking of the item that was purchased.

Solution-- as an advance

To set up an advance to an employee, follow these steps:

1. Choose Payroll Records from the Costs menu.
2. Click the New button.
3. Enter the Employee into the Employee field.
4. Enter Advance into the Transaction Type field.
5. Enter the amount in the Amount field.

To pay the advance to the employee (via the indirect purchase), follow these steps:

1. Choose Credit Card Transactions from the Bank menu, and choose the account you used for the purchase. NOTE-- If you made the purchase by check, choose Checking Transactions instead. if you made the purchase with cash, choose Cash Transactions.
2. Click the New button.
3. Enter Employee into the Pay To popup field.
4. Enter the employee into the Account clairvoyant field.
5. Enter Payroll into the Transaction Paid popup field.
6. Enter the Payroll Record that you created in the last section into the Reference field.
7. Use the Comments field to make any notes you'd like about the transaction.
8. Hit the Enter key to save the record.

To deduct the repayment of the advance, follow these steps:

1. Choose Payroll Records from the Costs menu.
2. Click the New button.
3. Enter the Employee into the Employee field.
4. Enter Repay Advance into the Transaction Type field.
5. Enter the amount in the Amount field.

Click here for more about Payroll Advances.

Comments

We don't have any 100% direct way to handle this kind of thing. It's a rather "fuzzy" transaction, the kind that drives accountants nuts, and that also applies to designers of payroll accounting software.

Entered 1/25/06 by Dennis