Our employees sometimes have food at our restaurant itself. Sometimes we give it out for free, but above a certain limit we charge them for the food.
For example: Total days cash sale amounts to $1000. Additionally, $20 worth of food is ordered by the employee. This $20 shall be deducted from his salary at the month end. How shall this entry be shown?
This $20 is basically a sale too, but we will not receive cash for it, but instead shall reduce from his salary.
You can create new deduction item as payslip item under
When you create this deduction item, select income account.
Then use this deduction item on payslip. This way, when you deduct $20 from employee gross pay, it will be increase your income on P&L and obviously decrease employee net pay.
Can I set this deduction item to Sales (Income)? or should I create a new account called “Employee Food”?
Should this additional $20 be counted as sales? Or no, as we are not receiving any cash for it, and only cash received through sales are entered in our Sales account.
You can set this deduction item to sales.
It can be counted as sales. It’s the same as if you paid employee full amount and then make them physically pay $20 for the food. This is what you are essentially doing anyway.
Ok Sorry for the trouble. I just need to know this for my own knowledge.
How to account this if i do not want it to show under my sales, but only as a deduction in the employee account? Because if i account this under sales, my daily cash tally wont match with the hard cash available.
Sorry again for the tsunami of questions.
You are trying to reconcile two figures (total sales, cash balance) which are not related.
You should have cash account created under
Cash Accounts tab. Under this cash account you should record all money received and money spent so the money physically held on hand by you must equal the amount reported under
Cash Accounts tab in Manager. So this what needs to be reconciled to your physical cash. Not “sales total”.
Yea but our daily sales is done in cash only. So our daily transactions include opening balance (cash in hand from previous day), cash sales for the day (no credit sales) & expenses of the day (like petrol, raw materials, daily wages, etc). So all we do is cash in & cash out, no credit transactions as such.
So, if I add this $20 under sales, my opening balance (+) my total sales for the day (-) the total expenses for the day will show $20 short in cash in hand. So for this scenario, i needed your feedback/suggestion.
Nowhere in the system you will see you are $20 short in cash on hand. Because you are not.
Your sales under income will consist of cash sales and non-cash sales to employees. And that’s OK.