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What is the procedure for Advances to Employee against Purchase of material.

Dear Friends,
Could any one tell me the procedure for Advances to Employee against Purchase of material.

Advanced taken 5000 INR
After 2 days, employee returned 2000 INR: Net effect 3000 INR is Expneses for Material In this case 3000 INR should be treated as expensed.

What are the to be used and what are the entries will effect. Finally we have to nullify the advance amount which was taken by employee.

As per you requirement i did the process in SAP and for that i had created the user manual also.

Go thru the manual which i created and attached here with.

I hope this will help you.

Go to F-52 for receiving part of the amount i.e: Rs.2000 (Sp. GL ind: E)




  • 16 Feb 2011 9:36 am rekha
    These Rs. 3000/- can be booked as exp

    Ist option you can clear the expenses against exp and remaining
    advance be cleared after refund of balance.

    IInd option is first pass the entry of recovery of full advance and
    then iind entry for posting of expenses .
  • 16 Feb 2011 9:59 am rekha
    I want to add some more clarification.

    If employee takes advance and refund the balance amount your scenario will be as followed.

    First entry.

    Advance to employee debit by 5000
    Cash/Bank credit by 5000

    This transaction you can record by, F-58, F-02 or F-48. as employee is configured FI vendor.

    Second entry.

    When employee refunds 2000 with all invoices of expenses.

    Expenses debit by 3000
    Cash/Bank debit by 2000

    Employee advance a/c credit by 5000

    If you have any confusion, please dont hasitate
  • 19 Dec 2015 3:30 pm Guest

    thanks for the help & clarification. what will be the senario in case where the employees refund the 2000 over two months.