Employee Loan

[Lbuford]

This is a first for us. One of our employees asked for a $800 loan to be paid back in weekly installments. Where should the loan payments be reflected in PowerChurch? Thank you in advance for any assistance with this.

[NeilZ]

This is a first for us. One of our employees asked for a $800 loan to be paid back in weekly installments. Where should the loan payments be reflected in PowerChurch? Thank you in advance for any assistance with this.

This is not new income, so you can't claim any income unless you're going to charge interest, and that would show as income, if that's the case let me know as that would involve a change to this procedure. In any case, what I would do is setup a negative liability account. Create a new liability account in your Chart of Accounts, you can name it anything you want, but name it something that reflects what its for.

When you create the invoice for the check to the employee, you would credit the checking account and DEBIT the liability account. The amount will show as a NEGATIVE amount in the liability account. As the amount is paid back, you would DEBIT the checking account, and CREDIT the liability account in a manual transaction you would create in Funds Accounting.

Here are the two manual transactions you would need to make, assuming that you use the default account number for checking, and created a new liability account (01-2510-000, for example) in your COA.

Loan invoice in Accounts Payable:
01-1110-000 Checking CREDIT $800.00
01-2519-000 Liability DEBIT $800.00

Payment in Funds Accounting:
01-1110-000 Checking DEBIT $100.00
01-2519-000 Liability CREDIT $100.00


Now if you're going to deduct the weekly payment from any paycheck, again, let me know as that would need a new Pay Item in payroll, and the payment transaction would not be needed as it would be part of the normal payroll transaction for the employee.

[Lbuford]

I understand and thank again, Neil!