Salary advance
In one sentenceAn amount the business gives the employee in advance from the salary, then recovers in installments deducted from future salaries on an agreed schedule.
Simply put
An advance is not an expense for the business: it is an amount owed by the employee, so it is recorded as an asset (an employee receivable) until recovered.
Agree with the employee in writing on the installment amount and the number of months, and track the remaining balance, because it is deducted from the final settlement if the contract ends before repayment.
Worked example
A store gave an employee an advance of 6,000 SAR to be recovered over 6 months.
Dr Employee advances6,000
Cr Cash6,000
Monthly installment: 6,000 ÷ 61,000
Monthly deduction from the salary1,000 SAR
in FullScreen ERP
The system schedules advances and deducts their installments from salaries. HR and payroll