Cash Advance Liquidation

Some companies would often provide cash advances to their employees whenever they need to do some activities (travel, meetings, etc.).
Most of the time, these so called "cash advances" are liquidated and are included within the company's list of spendings report. 

In order for these information to appear in your JuanTax account, you first need to set this up in Xero.

I. Creating an Account

Start creating an account in Xero by going through the Chart of Accounts section.
STEP 1: Go to Accounting > Chart of Accounts.

STEP 2:  Click Add Account button.

STEP 3:. For the Account Details, select your account type and enter a unique account code. 

STEP 4: Enter an account name and description and then select the appropriate tax settings before hitting Save

Note: In this one we used Employee Cash Advance

Once created, you can now proceed on creating bills with Xero.

II. Creating Bills in Xero

For this process we will create 2 bills:

  • Cash Advance

  • Purchase of Employee

II.a. Cash Advance

STEP 1: In our first bill, aside from using the term "Cash Advance" in fields such as From and Description, you also need to use the account that you created earlier (Employee Cash Advance in the example) and set the tax rate to Tax Exempt (0%). Click the Approvebutton to proceed with payment

STEP 2: After approving the bill, you need to pay it by clicking the Add Payment button. But before that, you have to enter the amount paid, date as well as the bank where you would pay the employee

II.b. Purchase of Employee

STEP 1: For your next bill, enter the actual purchase made by the employee after being provided with the cash advance, then click approve

Note: In this one I used a purchase receipt at Starbucks as example, and coded it as VAT on Purchases (Goods)(12%).

STEP 2: Proceed with the payment where you also need to include the amount as well as date paid

Note:  (For the paid from section, I used the account that I made earlier (Employee Cash Advance) and used Cash Advance - 1 as my Reference).

 Click the Add Payment button to continue

III. Report in Xero

After paying the two bills, you may now proceed with the next part which is the generating of report in Xero:

STEP 1: Go to Accounting >  Reports.

STEP 2: Choose the Accounting Transactions report under the Accounting category.

STEP 3:  Set the parameters of the report such as Accounts and Date Range

Note:  I used the Emplolyee Cash Advance account in this example. 

STEP 4: Click the Update button after setting it all up

Once the report has been generated, you will see all the information from the bills that you created in Xero under the Employee Cash Advance account. 

In this report below, it indicates the actual amount that was given to the employee, the purchase made by the employee and the remaining amount from that cash advance.

Back to JuanTax...

Once you generate a report in JuanTax, you will see the actual purchase made by the employee, and the term cash advance would show up in the reference section of the report.

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