Issue the advance
Custody is money an employee takes to spend for the business, then brings back receipts for. Open the Banking page, then the Employee custody tab, and press New advance. Choose the Employee from your contacts, enter the Amount and Issued on date, pick the account in Paid from (1) and write the Purpose. Leave Issue now (post the entry) (2) ticked and press Issue.
| Account | Debit | Credit |
|---|---|---|
| Employee custody | 2,000.00 | |
| Bank or cash | 2,000.00 |
If your business requires approval for advances, untick the box, press Save as draft, then Send for approval. The advance is not issued or posted until it is approved.
Add the receipts the employee brings back
Choose the advance in the list and press Add receipt. Enter the expense account, amount and VAT, then press Save. Still held drops by the receipt, and the advance moves to Settling. Receipts cannot exceed what the employee still holds.
| Account | Debit | Credit |
|---|---|---|
| Travel | 1,000.00 | |
| Input VAT | 150.00 | |
| Employee custody | 1,150.00 |
Take back what is left in cash
If the employee hands back the rest, press Return cash and choose the account it went into and the date. Leave the amount empty for the whole remaining balance.
| Account | Debit | Credit |
|---|---|---|
| Bank or cash | 850.00 | |
| Employee custody | 850.00 |
Write off what will not come back
If what is left has no receipt and will not be returned, press Write off remainder and choose the Expense account. The amount becomes an expense of the business, and the advance reads Written off once the balance reaches zero.
A write-off posts an expense entry as soon as you save, so check the amount first.
Confirm it is settled
When Still held reaches zero the advance becomes Settled by itself and moves to the Settled filter. The Held by employees card shows the total not yet settled.
Salary advances from HR are different from custody: they post through payroll to Employee advances and are recovered from salaries.
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