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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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.
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!
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?