Advance to Staff

Let it be the accounting part, my exact problem is that when I pass advance paid through “Reciept & Payment” the system gives me option of customer only. I want that advance can be made to employee also, so why there is not an option for employees list.
I’ll try to show you through images if possible, I know its difficult to understand my issue.


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I now understand what you are asking. There is no need for screen shots. When you enter a receipt or payment, there is no “option” for anyone. Not customers, not suppliers, not employees. You enter either a Payer or a Payee. If you have entered such entities before, as you start to type, matches to what you have typed appear as part of the autofill feature. If you have entered payments to an employee before, that employee’s name can appear in the list.

If you are paying an employee, the appropriate account to choose is Employee clearing account. Once you have selected that, a dropdown list of employees appears.

But nothing in that process is going to tell you how much to pay an employee. Any amount you owe them from payslips is listed in Employee clearing account. If you want advances to be reflected there, you need to allocate the advances to that account and the employee’s subaccount…

Ohh great, actually what you are saying is helpful but If I Debit Employee Clearing Account, then I’ll not be able to reconcile the payment already made through Employee Clearing account at future date whether this was given as advance or as a salary. But yes we can use description for that purpose.

I understood.

Last question, is there any chance to connect any list say Customer, Supplier or Employee to any account which I have created??

I hope you got me, I want that the moment I choose a particular account an additional drop down box of above item appears.

If it is possible please let me know :):blush:

Create a control account made up of whichever type subaccounts you want.

hey @Tut ,
I can’t find any option of creating control accounts with employees.


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You are correct, @Ashish_Mishra. I apologize for my faulty memory. While there are 9 categories for custom control accounts, employees are not one for some reason. Employees can only be used with the built-in control account, Employee clearing account.

You could, however, set up a control account made of special accounts and create a special account for every employee to whom you make an advance. That is not as convenient as automatically having all employees available. But, assuming you are not making advances to every employee, the task of setting up a special account whenever you make the first advance to an employee should not be too bad.

Again, I’m sorry for the bad information. That is what I get for replying from memory instead of double-checking.

You are helping out us so its ok if you have made such a small mistake.

Thanks once again, I’ll try to follow what you have said.


Sorry I have to revisit this issue but using employee clearing account which is actually simplified, means there is no way of spreeding the advance over a period. That is if the advance is more than the net pay, the employee wont have salary that month.

Another problem is where staff can buy product on credit. I have created each of such staff as customer at point of invoicing and have created Credit sales recovered as payslip item linked to a credit sales recovery account. After salary whatever is in the clearing account is net off by journal against the staff customer accounts. Is this practice ok?

Yes, there is. I assume you actually mean there is no way of recovering the advance over a period. That is not how things work. The Employee clearing account records how much you owe an employee or they owe you. It does not control how much an employee is paid. See Pay employees | Manager. Look at the section headed " Other situations for one employee." If you drill all the way down, you will be able to tell what is owed for any recent payslips and what is owed for an advance. Adjust the payment so you are only including a portion of the advance.

Personally, I don’t recommend handling employee advances with payslips, though, because it makes them look like expenses of the company. They are not. They are loans to employees and belong on the balance sheet as assets. They can still be recovered by adjustments of payroll payments, with a separate line item posted to the loan account.

There are other ways to handle employee advances, too. Search the forum for discussions of them.

Your practices for sales to employees are overly complex as you described them. When you sell to an employee on a sales invoice, you create a balance in Accounts receivable for that specific employee-customer. The charging method must clear that receivable. And you cannot set up payslip items to post to Accounts receivable at any level, let alone for the individual employee-customer. Those payslip earnings items (which would have to be entered as negative numbers) therefore will never clear Accounts receivable. Your method of using journal entries to move things around seems too complex.

As with employee advances. When you make a payment to an employee-customer, just add another line item. Post it to Accounts receivable > Employee > Invoice. Enter the unit price as a negative number.

In both of the situations you asked about, remember that a payslip is not a payroll statement of amounts paid. The payslip only records amounts earned, deducted on behalf of outside entities, and contributed by the company on behalf of the employee. The payslip creates liabilities. The payment form is where you record amounts paid or recovered.

Thanks for your response. The clearing account will help for the salary advance.
But for the credit there is still need for simpler approach.

I am not sure what could be simpler than one line on a payment form.

I have not quite understood your recommendation regarding sales to staff. Kindly expantiate.

Here is an example for an employee named Ernst Handel.

Handel earns 1000, recorded on a payslip:

Handel also buys merchandise from the company, so is set up as a customer. A sales invoice is issued:

So Handel owes the company more than his current earnings. A payment transaction is entered for his weekly pay. Part of the sales invoice receivable is recovered:

The Employee clearing account for Handel is now zero:

Screen Shot 2019-12-28 at 7.08.57 AM

and the sales invoice shows the reduced balance due:

Thanks for the answer. This is great.
But there is a challenge: Recoveries of loan or credit purchase via salary need be shown in the payslip for staff to get all the details. How do I do this?

Recovery of the loan is not a part of the payroll function. It is part of the accounts receivable function, because you are treating the employee as a customer. If you follow the method I showed, the way to document loan payments for the employee is by giving a copy of the payment form. It will show how much net pay was paid, plus the reduction for loan recovery.

You can’t, it is a limitation with Manager’ payroll system.

To inform your employee why the amount deposited in their bank is less than the payslip you issued, the best you can do is also attach a receipt for partial payment of the invoice when emailing their payslip.

I agree a better solution would be for recurrent payslip items to support linking to an invoice. That would enable the payslip total to equal the payment the employee sees deposited in their bank account.

It would also enable Manager to support employers reporting obligations in jurisdictions where; when a contractor works in a similar manner to an employee, then the employer must withhold tax and report income in a similar manner. Australia’s tax system is an example.

You can already do this by setting the contractor up as a supplier. Simply enter purchase invoices instead of payslips. Establish suitable accounts for posting the various tax deductions, etc. Likewise, there is really no reason you could not use the payroll functions. Create separate payslip items to cover contractors instead of employees. As I see it, the reason to do one versus the other depends on how your tax authority views the dividing line between employees and subcontractors. If they try to force you to treat people as employees, you probably want to emphasize their status as outside contractors in your accounting methods.

I do not have staff purchasing things from my business which they pay for with wage deductions, nor to I employ contractors who work in an equivalent role as employees for which these requirements would be valuable. As such I personally would not benefit if Manager added the functionality. My interest is only in encouraging general solutions so changes do not need to be repeatedly implemented.

No you can not as the functionality I was referring to was generating the required reports not entered data in Manager.


That is not a meaningful option. Taxation legislation is written to ensure taxes are paid when and how the the Government wants them paid, enforced with penalties and audits.

For example in Australia contractors who supply labor similar to an employee have PAYG voluntary agreements resulting in tax with held and reported by their customer using identical reports to that used by employers for employees; which in Managers is done by the PAYG payment summary — individual non-business and Single Touch Payroll Worksheet. Both reports are only available when using payslip items.

Where the contractor’s work arrangement further parallels that of employee, they are then further constrained by Personal services income legislation.

In summary Managers payroll functionally could be enhanced in a way which would help a variety of users if done in a general manner. The use case described here is straying off topic but was mentioned as a generalization of the solution the OP was looking for.

Payslips are not restricted documents, that is, their content is not limited to just earnings related items. Therefore, you simply create a separate Payslip Item for each detail which you want to appear on the payslip. They could even be created for messages.

First you create a Chart of Account which will be associated with each Payslip Item. Using your examples, these are Employee Advances and Employee Credit Sales. Even though these are Asset accounts they are initially created as Liability accounts.
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Then you create the Payslip Deduction Items using the related Chart of Accounts:
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Now go back to the Chart of Accounts and edit those accounts from being Liabilities to Assets:
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Wallah, you have just outsmarted that artificial Manager limitation.
Now create your payslip. I used advance of 500, credit sale of 250 and other nominal amounts:

This now reconciles with the employees bank receipt with one document.
Now, depending on your volume of these types of transactions you could amalgamate accounts.

@Abanye, based on your earlier comments, I respect that you have the skills to do any tidy up between accounts as required.

Yes. Thanks for your support.