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Level 1

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

I am not fully understanding why a loan that we give to an employee would be an asset? It is money we are out up front and (hopefully) paid back at a later date. I would assume it is an A/R but maybe there is some other way to classify it. If there is, how would I change this account?

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Best answer October 19, 2018

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Level 15

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

If you made the loan to the employee, then yes that is correct

View solution in original post

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Level 15

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

If you made the loan to the employee, then yes that is correct

View solution in original post

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Level 1

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

If we made the loan then it is correct as an asset?
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Level 15

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

yes, they owe you money, that debt is an asset
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Level 4

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

Yes Employee Loans (or Advances) are an Other Asset (Other Current Asset if it will be repaid within 1 year).  It is similar to Accounts Receiveable but that is for amounts due from customers.

I hope this was helpful.
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Level 1

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

That cleared it up. Thanks!
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Level 4

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

Glad to help add to Rustler's comments. :)
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Level 2

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

How does it get coded?

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QuickBooks Team

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

Hello, @JillP34.


Thanks for coming to the Community for help.  I can help you record the loan in QuickBooks Online.


As mentioned above, you would need to set up an Other Current Asset account called Employee Cash Advance or Payroll Receivable.

Here’s how:
1.    Go to Accounting from the left menu and select Chart of Accounts.
2.    Click New.
3.    On the Account Type field, select Other Current Asset.
4.    Under Detail Type, choose Employee Cash Advances.
5.    Enter name.
6.    Hit Save and Close.

 

 


Once done, write the advance check by debiting the new account and crediting Cash. When deducting from your employee’s pay, credit the new account and debit Payroll Payable.


That should answer your question for today. Let me know if you need further assistance working with QuickBooks, I’ll be here to help. Take care and enjoy your day!

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Level 1

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

what if the loan is repaid in more than one year

1- how do we classify it

2 - dose the classification change each year

 

 

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Level 2

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

If this is a loan to a subcontractor, would I select the Detail Type as 'Loan to Others' and Name it something like Loans to Subcontractors? Would I then deduct from the subcontractor's payment or is there a better way?

 

Thanks!

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Level 8

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

A loan to anyone where you will be deducting amounts owed to you from payments to them is more often called an Advance, since you have essentially paid them in advance for work they will do for you. Same for employees.
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Level 2

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

Can you tell me how we should set up the payment if the employee repays us with a personal check. It appears the way described above is set up to withhold loan repayments via the employees paycheck, but our employee is paying us back all at once with a check.  Many thanks.

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QuickBooks Team

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

Thanks for joining this thread, @AMS1.

 

You can enter the employee's pay back as a deposit transaction. I'm here to walk you through the steps:

  1. Go to the Create (Gear) icon and choose Bank Deposit.
  2. Enter and select the appropriate data.
  3. Click Save and Close.

To learn more, you can refer to the Record and Manage Bank Deposits in QuickBooks Online article. The link provides an overview and video tutorial to enter the transaction.

 

You can also check our help articles in case you have any other QuickBooks concerns in the future: Help articles for QBO.

 

Let me know if you have any other questions. I'm always here to help. Have a good one!

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Level 1

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

What would you classify the repayment of the Subcontractor's Advance? We are deducting it to the amount we currently owe him since he has not paid the advance back yet.

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Level 3

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

Hi @Teri 

 

Sorry for bringing out this old thread but I have the same question someone ask and I would like to make sure I understood.

 

So are you saying that a loan to a subcontractor could be classified as an Asset? And as someone mentioned above, would I select the Detail Type as 'Loan to Others' and Name it something like Loans to Subcontractors? Would I then deduct from the subcontractor's payment or is there a better way?

 

Maggie

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Level 1

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

What if the employee quits before he repays the loan.  How do I convert it to income? 

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Level 1

Our chart of accounts shows employee loans as an "other current assets". Is that the best way to categorize them? I would think it was an expense or A/R

If the employee quits before repaying the advance (and you've exhausted all collection efforts), than you write it off as a bad debt (expense...not income).

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