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Recovery of advance through Payroll

Former Member
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HI Guru,

I have one scenario given below.

I given Advance amount : 5000 to employee by Off -Cycle.and we posted to Finance.

Now employee give return 2000 .

So this 2000 amount how we can process in system. and same with Finance.

Please advice on Priority basis......

Regards,

Sharma

.

Accepted Solutions (0)

Answers (1)

Answers (1)

former_member193210
Active Contributor
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You should have a WT for Advances, and an other for Reimbursement of Advances, both for use in Off-Cycle (with appropriate postings to Finance).

In your scenario, since employee reimbursed outside of Payroll (cash or cheque), processing in Payroll would probably be done in Off-Cycle but without impact on the employee's net pay, unless Finance takes care of the Journal entries directly (didn't they receive the payment?).

Former Member
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Hi Remi,

Many Thanks to you for immediate reply.

Appreciate the efforts from your side.

Honestly speaking, i did not  understand your reply.

request to you, please explain in brief with one scenario.

That will be great for me at this moment.

Concern is about: how to make an entry in HR, what ever the amount employee will return from Advance.

If you require more clarity on this, please advice me for the same.

Regards,

Sharma

former_member193210
Active Contributor
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In Off-Cycle, you gave the employee 5000 and posted to Finance.

In Off-Cycle, can you give the employee -2000 (negative 2000) and post it to Finance?

In "Regular" payroll, can you deduct 2000 from employee and post it to Finance?

Former Member
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Hi Remi,

Good evening.

Thanks for reply on quickly and sorry for late reply from my side.

Please correct if i am wrong:

So you means to say: First Step will be:we will gave the employee 5000 and posted to Finance.

2nd step: Please advice  In which IT we will make an entry of Negative Values say( -2000) or in which payroll we will run this Negative Values say( -2000). In off cycle or in Regular Payroll.

3rd Step: How we will recover 3000 from employee.

So request to you please provide me the steps. So i can make the testing for this scanario.

REgards

Sharma

former_member193210
Active Contributor
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In your initial post, you mentioned that you had given the employee 5000 and posted it to Finance.

To do that, you must have a WT for "Advance", and it must be mapped to FI/CO.

What I am asking you is, can you use the same WT with a negative amount ?

  - in Off Cycle to record the amount the employee gave back

  - in Regular Payroll to make a deduction

Better yet, you would create 2 new WTs, one for Off Cycle to record what the employee gives back, and a second one to use in Regular Payroll to make a deduction from the employee's pay.  These would need to be mapped to FI/CO but only the second WT would have an impact on the Net Pay.

Former Member
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HI Remi,

Once again thanks to you providing me guidelines....

What I am asking you is, can you use the same WT with a negative amount ?

Ans: i have no clue on this Remi.

So please correct if i am wrong, what i understood from your advice..

So total  i have to create 3 Wage Types

1. create WT to provide Advance to employee let say (9001 with amount (5000)

1.1. Then we will run payroll and post to fico.

2, To create a wage type as deduction 9002 which employee gave back (2000) with negative value. and we will put into IT 15

2.1 No need to process this  WT amount in any payroll.

3. Wage Type for Recovery (9003) of Advance as deduction in IT 15, with amount (3000)

Then run the regular payroll and recover the amount of (9003) WT with regular payroll only.

3.1 Then post to FICO.

Please correct if i write any thing wrong....

Thanks,

Sharma

former_member193210
Active Contributor
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As I mentioned previously, I had presumed that you already had processed a WT through Off-Cycle to give an Advance to an employee, and that it was posted to FI/CO.

If nothing is done yet, then you should first query what will be your Business Process.

If the Advance is processed through Payroll (Regular or Off-Cycle) and generates a payment to the employee, then the WT should be mapped to FI/CO.  And to make a payroll deduction for the reimbursement of the advance you could use the same WT in negative, but it is better to have a distinct WT.

As for Off-Cycle Adjustments, if all you want is to keep a record that the employee received an Advance directly from Finance or reimbursed money directly to Finance, then you would require different types of WTs since these should not have any impact on net pay.

Any IT0015 should be processed through Payroll.  A negative deduction will generate a reimbursement (payment) just as a negative payment should generate an Arrears or a Claim.

Any Advance or Reimbursement should be posted to Finance, but when the exchange is done outside of Payroll then Ledger Entries are usually required.