How do I write off a Payroll Advance?

Part I: Removing the advance for the particular employee

1. Create a paycheque for the employee in question
2. Under check number; enter in a unique identifier to show that this cheque is writing off an outstanding advance (IE: Write-off (date) )
3. In the advances box, put in the negative amount of the advance to zero out (or equivalent portion of the advance that you are writing off).
4. Verify that there are no other expenditures coming off of the cheque (Benefits, user defined deductions, etc..)
5. Select Report, then Display Payroll Journal Entry to verify entry is correct Post paycheque.

Note: Advance for employee has now been removed from the employee portion.

Part II: Journal Entry to now write off the amount that was just put back into the bank account

1. Create a journal entry.
2. Credit the bank account that you just put "back" the money into.
3. Debit the account in which you want to store the write off amount into (please consult with your accountant on this account).
4. Enter in a Source (unique identifier).
5. Select Post.

• Alternatively, you could create a reimbursement income called Loan Write off and follow the steps in part 1 except you can make the "cheque" $0 by putting a positive amount beside the Loan Writeoff to offset the negative amount beside Advances. You won't need to do part 2 if you do it this way. The income will not show on the employee's T.
• For steps to create a reimbursement income, please follow Article ID 10127 How do I create a new payroll income or deduction?, in Related Resources