Recording employee loan check is transferred to payroll liabilities

TGC2081 · ‎January 25, 2022

Last year I set up an Employee Cash Advance account to write an employee loan check. I linked the payroll item used to deduct money from that employee's check for repayment. Everything worked fine in Quickbooks. Now, we have written a new employee loan check and when I try to record it using the Employee Cash Advance account, it redirects me to the payroll liabilities window. What is the best way to write the employee loan check (it was a check written outside of payroll)?

ReymondO · ‎January 25, 2022

Hi there, @TGC2081.

I'll help record your employee loan in QuickBooks Desktop (QBDT). Let me show you how.

First, use an Other Current Asset account to track employee loan. Here's how:

Go to the Lists menu, then select Chart of Accounts.
From the Account ▼drop-down list, click New.
Select Other Current Asset as an account type, then click Continue.
Complete the account details.
Click Save & Close.

Once done, write a check and use the employee loan account you've created to record the loan.

To record any payment made against the loan by the employee, create a bank deposit. Make sure to use the other current asset account you've created to correct your bank's balance.

Moreover, you can reach out to your accountant for further guidance in recording the employee loan in QuickBooks. This way, we can ensure that your books are accurate.

You can also check out our Year-End Guide for QuickBooks Desktop. This will provide you with some info on what you'll need to do when closing your books and preparing for the new one.

Let me know how else I can help you with QuickBooks by adding a comment below. I'm more than happy to lend a helping hand. Keep safe!

View solution in original post

ReymondO · ‎January 25, 2022

Hi there, @TGC2081.

I'll help record your employee loan in QuickBooks Desktop (QBDT). Let me show you how.

First, use an Other Current Asset account to track employee loan. Here's how:

Go to the Lists menu, then select Chart of Accounts.
From the Account ▼drop-down list, click New.
Select Other Current Asset as an account type, then click Continue.
Complete the account details.
Click Save & Close.

Once done, write a check and use the employee loan account you've created to record the loan.

To record any payment made against the loan by the employee, create a bank deposit. Make sure to use the other current asset account you've created to correct your bank's balance.

Moreover, you can reach out to your accountant for further guidance in recording the employee loan in QuickBooks. This way, we can ensure that your books are accurate.

You can also check out our Year-End Guide for QuickBooks Desktop. This will provide you with some info on what you'll need to do when closing your books and preparing for the new one.

Let me know how else I can help you with QuickBooks by adding a comment below. I'm more than happy to lend a helping hand. Keep safe!

TGC2081 · ‎January 25, 2022

I have already set up an Other Current Asset account called Employee Cash Advance. The problem is that when I write a check using this account as the expense account, Quickbooks says that I am trying to pay a payroll liability and redirects me to the payroll liabilities window. This is the same account I have used to track employee loans in the past.

LeizylM · ‎January 25, 2022

Thanks for getting back to us, TGC2081.

I'm here to share additional information so you'll be able to write check with no issue in QuickBooks Desktop.

I've try to replicate here on my end and I was able to create a write in QuickBooks Desktop. You'll have to make sure the account is set up correctly.

If the same thing happens, we can verify and rebuild your data in QuickBooks Desktop. By doing this, we can identify and resolve the most commonly known data issues within your company file.

Here's how:

Select Window and then select Close All.
Go to the File menu.
Choose Utilities and then click Verify Data.

If you see these results:

QuickBooks detected no problems with your data, no further action is needed.
When there's a specific error message, you can search it in our QuickBooks Desktop support site for specific instructions.
Your data has lost integrity, indicates that there's data damage, we can follow the steps below to correct the problem:

Choose the File menu.
Select Utilities and then choose Rebuild Data.
You'll receive a notification to backup your company file, and then click OK.
Once done, the Rebuild Data utility will start.
When you get the message, Rebuild has completed, Click OK.

I've added this article to provide you some insight into what you'll need to do when closing your books and getting ready to start a new one: QuickBooks Desktop Year-End Guide.

I'm always here to help you. Just click the Reply button to add a comment. Have a pleasant day

TGC2081 · ‎January 26, 2022

I verified the data and there were no errors; this did not solve the problem. I returned to writing a check, but instead of manually entering the information, I recalled the data from the last Employee Loan check I wrote, changed the name that the check was written to, and it worked. I don't understand why because the Employee Cash Advance account that I used from the recalled check is the same account I was manually selecting. Somehow manually selecting the account triggers a payroll liability but recalling the data does not.

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Recording employee loan check is transferred to payroll liabilities