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ROBIN-BC-CANADA
Level 2

How to match advance payments to an employee against their payroll cheque?

Several advance payments have been made to employees against our payroll. The advances were occasional and for various amounts. Payroll was run as if no advance payment was made and the cheque cut for the nett pay, less any advances made during the period. The bank transactions cannot be matched to the payroll as the amounts are not the same. How could this be dealt with to match past transactions, and how should this be done in the future? Thanks for any assistance!
Solved
Best answer March 18, 2022

Best Answers
ROBIN-BC-CANADA
Level 2

How to match advance payments to an employee against their payroll cheque?

I did invent a solution... 11 steps...

1. Create an Employee Cash Advance account in QB chart of accounts

2. Create cheques in QB for all the cash advances, dated same day as the historic advance payments were made

3. Go to the transaction feed and match off all the advance payments from the bank feed against these new cheques

4. Now the bank feed is left with the balancing payments made against the paycheques. 

5. Go into the paycheque list

6. Delete all the paycheques against which advances were made (obviously copy details first!)

7. Go to the employee section and create a payroll deduction equal to that advance made against the first deleted paycheque 

8. Now go to payroll and recreate the paycheque by rerunning the payroll for period of the deleted paycheque - NB set the pay date to the original paycheque pay date or the taxes may be wrong!

9. Reprint the revised pay stub to give to the employee

10. Go to the bank feed and match the paycheque to the balancing payment which was made previously

11 Repeat steps 7-10 until all the deleted paycheques have been recreated.

 

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15 Comments 15
Archie_B
QuickBooks Team

How to match advance payments to an employee against their payroll cheque?

Welcome to the Community, ROBIN-BC-CANADA.

 

Let me help and share what I know about handling employees cash advance repayment in QuickBooks Online Payroll.

 

Make sure to consult an accountant or tax adviser before setting up the payroll item for the cash advance repayment.

 

You can set up a a cash advance repayment to deduct your employee's paycheck and exclude the  transactions showing in your bank feeds so don't have to match it. Let me show you how to set up the payroll deduction item in QuickBooks Online Payroll Enhanced.

 

Here's how:

 

  1. Go to the Payroll menu, then choose Employees.
  2. Tap on the employee's name.
  3. Click edit (pencil) icon in the Pay section.
  4. Click Add a new deduction and select the cash advance deduction you created above.
  5. Select either $ Amount or % of Gross Pay.
  6. Put the amount or percentage.
  7. Enter the annual maximum amount (optional).
  8. Select OK, then Done.

 

If you're using QuickBooks Online Payroll Full Service, QuickBooks Online Payroll Core, QuickBooks Online Payroll Premium, or QuickBooks Online Payroll Elite, you may check the detailed steps in this article: Set up cash advance repayment deduction.

 

Once done, use this link as a reference in excluding the bank transactions in QuickBooks Online.

 

Please don't hesitate to get back to me if you still have other payroll concerns or follow-up questions. I'll be happy to help. Have a great day!

ROBIN-BC-CANADA
Level 2

How to match advance payments to an employee against their payroll cheque?

Thanks for the reply, Archie_B.

This looks like the same info I read in the QB Help topic on this matter.

However, this doesn't appear help me for historical payments as I have already made the cash advances and then run the payroll as I described. 

This method may work for going forward but looks clumsy as the deductions appear to have to applied as if they are ongoing and not simply applied to a single payroll period.

Have I misunderstood?

 

Thanks - Robin

RCV
QuickBooks Team
QuickBooks Team

How to match advance payments to an employee against their payroll cheque?

Thanks for coming back, ROBIN-BC-CANADA.

 

Yes, the bank transactions will not be matched to the payroll as the amounts are not the same since the deductions are not included in the paycheck. To match advance payments to an employee against their payroll checks, we'll need to exclude first the bank transactions and make sure to deduct the advance payment moving forward. Here's how:

  1. Go to the Banking menu, then choose the Banking tab.
  2. Scroll down to select the For Review tab.
  3. Tap the check boxes of the transactions to exclude.
  4. Click the Batch actions drop-down button, then choose the Exclude Selected option. 

 

Once done, the transaction moves to the Excluded tab of the Banking page. Once a downloaded transaction is either accepted or excluded, QuickBooks will stop the bank from bringing the transaction into the bank feed again. Here's an article you can refer to for more details about excluding a bank transaction you downloaded into QuickBooks Online

 

For historical payments, we'll need adjustment and payroll correction. Here's an article you can refer to for more details about setting up a prior payroll for QuickBooks Online Payroll. Since paychecks are already created, I'd suggest contacting our Payroll Support Team. They'll access your account and create an adjustment to record the old payroll transactions before using QuickBooks. Here's how to reach out to them:

  1. Click the (?) Help icon in the upper right-hand corner of the Dashboard.
  2. Select Talk to a Human.
  3. Enter a short description of your concern and press Enter.
  4. Click I still need a human.
  5. Select Contact Us to connect with our live support.
  6. Choose Get a callback.

 

Feel free to visit our Banking page for more insights about managing your company's income and sales transactions.

 

Please update us after contacting our support as I want to make sure this is resolved for you. Just leave a comment below and I'll get back to you. Have a great weekend. 

ROBIN-BC-CANADA
Level 2

How to match advance payments to an employee against their payroll cheque?

Hi Archie_B

 

Responding to the above:

 

Excluding transactions: I do not want to exclude the prepayment transaction that I import form my bank.

The transaction is part of my payroll payment.

Here's what I did:

Employee A receives an electronic bank advance of $500 before payroll date

I then run payroll. Employee wages (nett) are $900 for the period

I electronically transfer the balance of $400 to the employee.

Both transactions appear in my bank feed, but what do I do with them to make them match to the payroll 'cheque' of $900?

 

Historical advances: All advances have been made whilst using QBooks for payroll. My issue does not refer to pre-Qbooks payroll.

 

Thanks again for your patience!

Bkkprgal
Level 4

How to match advance payments to an employee against their payroll cheque?

Robin, 

 

You might have already figured this out, but you have two options.

  1. Exclude the bank feed transactions and when you reconcile, just remember to check off the $900 so the statement balances. 
  2. Open the bank feed transaction and click Find Match.  You may need to change the filters around to get it to look everwhere - ie: Show:All; and the From/To dates.  Then hopefully you'll see your $900 transaction in the list.  Check it off.  You'll see that there is a balance difference at the bottom and there's an option to Resolve - don't click that.  Just hit Save.  Now go to the other bank feed transaction and do the same thing.  Ideally, you'll see that same $900 payment, hopefully with the amount leftover to be matched showing in the Open Balance column.  Check that transaction off and you should be good to go.  

 

Hope this helps!

ROBIN-BC-CANADA
Level 2

How to match advance payments to an employee against their payroll cheque?

Hi Bkkprgal, 

 

I'd love to do your option 2, but the payroll cheques do not appear in the list of possible matches if the sum to be matched is less than the payroll cheque amount...

Any suggestions as to how to get the unmatched payroll cheques to appear in the match list?

 

Thanks

 

 

Bkkprgal
Level 4

How to match advance payments to an employee against their payroll cheque?

I didn't realize that paychecks won't show up on that Match screen.  That's strange.  In that case, I would just suggest that you Exclude those bank feed transactions entirely.   You'll never get them to match.  Just remember to check them off when you reconcile that month's statement and you'll be fine.  The reconcile is the important part of the puzzle, not the bank feed.  You know that the transactions are correct.  

ROBIN-BC-CANADA
Level 2

How to match advance payments to an employee against their payroll cheque?

Is there a way to go back and add the deduction of the advance to the payroll cheque?

I could add the cash advance into an Employee Cash Advance account, by issuing a cheque transaction in the amount of the advance, then apply it as a deduction to the the pay cheque.

That way, in my example, the $500 advance will appear int the Employee Cash Advance account and can be matched with a payment from the bank feed.

Then my $900 paycheque would have the $500 advance deducted and the balancing payment of $400 will now also matched with a payment from the bank feed.

So, can I edit a payroll cheque to add a deduction? I can't see an immediate way to do this.

Thanks for your help! 

 

ROBIN-BC-CANADA
Level 2

How to match advance payments to an employee against their payroll cheque?

I did invent a solution... 11 steps...

1. Create an Employee Cash Advance account in QB chart of accounts

2. Create cheques in QB for all the cash advances, dated same day as the historic advance payments were made

3. Go to the transaction feed and match off all the advance payments from the bank feed against these new cheques

4. Now the bank feed is left with the balancing payments made against the paycheques. 

5. Go into the paycheque list

6. Delete all the paycheques against which advances were made (obviously copy details first!)

7. Go to the employee section and create a payroll deduction equal to that advance made against the first deleted paycheque 

8. Now go to payroll and recreate the paycheque by rerunning the payroll for period of the deleted paycheque - NB set the pay date to the original paycheque pay date or the taxes may be wrong!

9. Reprint the revised pay stub to give to the employee

10. Go to the bank feed and match the paycheque to the balancing payment which was made previously

11 Repeat steps 7-10 until all the deleted paycheques have been recreated.

 

AlcaeusF
Moderator

How to match advance payments to an employee against their payroll cheque?

Hello @ROBIN-BC-CANADA,

 

I have reviewed the solution you’ve shared and it's correct and accurate. Thank you for sharing your inputs to help address the issue.

 

We love to see members supporting one another! Have a great day.

AdviceWelcome
Level 1

How to match advance payments to an employee against their payroll cheque?

Hello. I realize this is an old thread but I am trying to make this identical fix. Unfortunately, it is not allowing me to delete an old paycheque without asking me to delete all of the paycheques run since. 

 

If anyone has a solution to this, it would be greatly appreciated. Thank you!

QueenC
Moderator

How to match advance payments to an employee against their payroll cheque?

Hello there, @AdviceWelcome.

 

Thanks for joining here in the thread and taking the time to follow the steps provided above. Allow me to assist you further and help you get through this.

 

In QuickBooks Online (QBO), deleting paychecks can have various implications and affect the overall accuracy of your financial records. Paychecks are essential for maintaining accurate employee records and payment history. Thus, deleting it may result in incomplete or inaccurate information for the affected employee, affecting their pay history, tax documents, and other related records.

 

We can, however, delete paychecks for the current only. QBO doesn't advise deleting past paychecks since it can impact payroll tax calculations and filings. Especially if the paycheck you're attempting to delete has associated tax calculations, cause it could lead to discrepancies in tax filings and potentially trigger the need to amend previously submitted tax forms.

 

With this, I would recommend getting in touch with our Customer Support Team for payroll correction. This way, they'll be able to pull up the account in a secure environment and help you perform the necessary steps. I'd be glad to include the steps how:

 

  1. Go to the Help icon and select Contact us in the Search tab.
  2. From the What can we help you with field, enter your question.
  3. Click on Continue.
  4. Choose either Appointment, Callback, or Chat.

 

Be sure to check their support hours to get assistance right away.

 

Additionally, here's an article that'll help you run, print, and customize payroll reports in QuickBooks Online: Run payroll reports.

 

As always, you are welcome to post here again if you have any other payroll-related questions. Keep safe.

AdviceWelcome
Level 1

How to match advance payments to an employee against their payroll cheque?

Thank you very much. Everything you are saying is making perfect sense. I will contact support during their operating hours to see how I should handle my payroll cheque concern.

DT31
Level 1

How to match advance payments to an employee against their payroll cheque?

Hi there,

 

I am facing the same issue right now.

I currently switched to QBO and my previous system allowed to match partial payment with the paycheck amount, so I did not see any problems coming when did the advanced payments to a few employees.

I guess I will have to exclude the transactions and to them manually somehow.

But that would be amazing if Quickbooks would add an option of split payments or advanced payments so we could match with the paycheck as if that would be with a bill.

Thank you.

AlcaeusF
Moderator

How to match advance payments to an employee against their payroll cheque?

Hi DT31,

 

Currently, the option to split payments to match the paycheck is unavailable in the Online version. I agree the feature would be a great addition to QBO and can benefit many users.

 

As we assess this, I encourage you to send feedback directly to our product engineers. We also make changes and adjustments to the product based on user feedback.

 

Here's how:

 

  1. Click the Gear icon in the upper-right corner.
  2. Select Feedback under Profile.
  3. Share your feedback.
  4. Hit Next to submit.

 

Additionally, you can use bank rules to categorize transactions automatically from your bank. Here's the link you can visit for additional reference about bank feeds in QuickBooks: Set up bank rules to categorize online banking transactions in QuickBooks Online.

 

Don't hesitate to reach out if you have more questions or concerns about matching payments. The Community and I will be happy to help you some more.

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