When preparing salary advances or even normal payments for the payroll, I would suggest the same application in sales and purchase invoices where payments are able to directly affect a particular invoice reference or month in case of payslips.
I have noticed each time I am preparing the payroll and processing some request of salary advances I am unable to allocate to a particular payslip reference or month for that payment to affect. In which case when a pay slip is generated for that particular month whose reference is well known too, the initial salary advance payment would not affect that needed payslip. However, the advance payment would be posted to the employee account and reduce theoverall liability from there.
So ideally, the deduction for the salary advance as a deduction item would not show on that payslip in question. The liability for that payslip would not reduce but only on the overall liability for that account. Can this be added to ideas?
Thanks for the reply @lubos. They are three difficulties I am trying to address
There times when employees are not paid for several months and one would like to know which months or payslips and there particular refeferences have been paid when the payments are made.
When salary advances or loans are gotten by employee from the company, wouldn’t it be ideal that the salary advance or loan payment affects the payslip under the deduction item column immediately so that the deduction reflects on the payslip.
In cases were Its a short term loan given to its employee maybe to be deducted for 6 months, a loan clearing Asset account would be made as it’s done always in order to track the loan. But the problems comes in when the deduction of this loan does not show on employees payslips.
So the short term loans would be delt with by creating recurrent journals for six months which would be connected to corresponding recurrent payslips so the deduction item line reflects on the employees payslips for particular reference or month. If possible indicate the balance of the loan on the side.
This will help the employer track which months or payslips are paid for by reference. And also the deduction item line on the payslips will be affected immediately the payment or jounal is made against the paylip.
Just my thought on how it can be achieved. But I am not a programmer. The only thing I would like see to is if advance payments or journals can affect particular payslip reference or months in order for them to reflect as deduction lines on paylips
Be mindful @lubos that payslips too can have varying due dates. Some companies pay weekly, some fortnightly and monthly for others. The same application for purchase invoices can be used for payslips. Afterall they are both just creating a liability for the company to honour maybe that’s why payslips have reference numbers on the other hand. I am guessing for tracking. It could also add a sense of consistency.
It’s not required; the idea is that payment follows a first-come, first-served approach. In our part of the world where it’s common for workers to go unpaid for months, the priority is settling earlier months first, and any remaining balance is then applied to subsequent months in chronological order until the most recent one. Thus, selecting payslips isn’t necessary; you just need to make payments to decrease the balance on the employee’s account.
What I would do, create a “loans account” and set up a deduction item linked to the loans account to manage loan repayments. This ensures the deduction is displayed on payslips. I would use custom reports to generate loan statements for employees (use filters to generate loan statement for individual employees).
Again this wouldn’t be necessary if you follow my suggestion.
Try as much as possible not to use journal entries. Make use of payslip items.