Processing of employee salary advances or loans in Pastel

[Tat]

Hie,

Please may you assist me in the following:
1. how to process employee salary advances or loans.
2. how to process the repayment if the advance or loan was deducted direct from the payroll.

Please note am using Pastel Partner V12 and Sage VIP payroll which are not linked.

Thank you,

Regards,

[Mike C]

Hi Tat - on Payroll you enter the code 8150 for "Staff Loans - reducing balance"
Enter the amount owed by the employee in the "Balance" column (eg the employee is advanced R2,000.00)
Enter the amount that the employee will be paying back per pay period in the the "Amount" column (eg paying back R250.00 per month)
Tab to the end of the line to save changes.

[Tat]

Hie Mike,

Thanks for the assistance. However am looking for entries in pastel partner v12. We issued loans to staff of which they will be deducted via the payroll. The payroll and the pastel partner are not linked at all. hw do i process such transaction including the repayment via the payroll.

[Mike C]

Hi Tat - not too sure that I understand the problem. After you have done your payroll run do you then pay your staff via EFT? If so, then that amount would get put to Salaries and Wages in your Accounting program.

If you issue an advance, it would also be entered into Salaries and Wages. As it is deducted from your payroll each month, the amount paid out would be less than the normal salary ... and entered into the Accounting Package as normal.

If you are wanting to keep a record of loans (advances) in your accounting package in addition to your payroll, you would need to open a ledger account callled "Staff Loans" (or something similar) and then do journal entries each month between that and your "Salary and Wages" to reflect the amount being paid.

Apologies if I have not grasped the question adequately.

[Tat]

Dear Mike,

Thanks, you have got the correct interpretation. Below is what I did.

1. I credited the cashbook and debited the staff loans account on issue of the loan amount
2. On the payroll I deducted the amount and debited the salaries and wages account with the full amount as follows (please note all these are journal entries);
a. Dr Salaries account less the loan the loan amount repayment
Cr Salaries Control account less the loan amount repayment
b. Dr the Salaries account with the loan amount repayment
Cr the staff loans account with loan amount repayment
3. On transferring the net salaries I did the following:
a. Dr the salaries control account less loan amount repayment
Cr cashbook less loan amount less loan amount repayment