Companies may be required to make advances and deductions to the employees prior to the payroll processing date. Although for most companies this is infrequent, there may be a number of reasons for this such as reimbursing out of pocket expenses for employees for large ticket items or companies paying for employee relating expenses such as additional visas or medical insurance which is not covered by the employer.
Once the relevant advance/deduction payment has been made, the amount is usually posted to a balance sheet account called employee advances/deduction and are held there until the payroll processing. Once the payroll has been processed, the advance/deduction would then be net off against the employee salary with the difference being posted to the employee advance/deduction balance sheet. The net effect of this balance sheet would be that the end balance be net off to zero
Companies may be required to make advances and deductions to the employees prior to the payroll processing date. Although for most companies this is infrequent, there may be a number of reasons for this such as reimbursing out of pocket expenses for employees for large ticket items or companies paying for employee relating expenses such as additional visas or medical insurance which is not covered by the employer.
Once the relevant advance/deduction payment has been made, the amount is usually posted to a balance sheet account called employee advances/deduction and are held there until the payroll processing. Once the payroll has been processed, the advance/deduction would then be net off against the employee salary with the difference being posted to the employee advance/deduction balance sheet. The net effect of this balance sheet would be that the end balance be net off to zero