Cash Advances for QuickBooks

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A cash advance is an advance payment to an employee that covers legitimate business expenses. This guide outlines the recommended process for handling cash advances when using Tallie with QuickBooks Desktop/QuickBooks Online.

Using this guide, you’ll learn how to:
 

Create a Cash Advance Account

To create a cash advance account in QuickBooks:
  • Open the Lists menu and click Chart of Accounts


     
  • Click the Account button in the lower-left corner and click New


     
  • Select Other Account Types, choose Other Current Asset, and then click Continue


     
  • Complete the details for your account. We recommend naming it “Employee Cash Advance”
  • Click Save when completed


To create a cash advance account in QuickBooks Online:
  • Click the gear icon in the upper-right corner
  • Under Settings, click on Chart of Accounts


     
  • Click New in the upper-right corner
  • Category Type = Other Current Asset
    Detail Type = Prepaid Expenses
    Name = Employee Cash Advance (recommended)


     
  • Click Save when completed



Record a Cash Advance

  • To record a cash advance, first create a bill in QBD/QBO and enter the following:
              a.       Vendor = Employee’s vendor name
              b.       Account = Employee Cash Advance
              c.       Amount = Cash advance amount
              d.       Memo = [Employee Name] Cash Advance




  • Pay the bill to cut the check
              a.       QBD:
                                i.      Click the Vendors menu
                               ii.      Click on Pay Bills
                              iii.      Check the box next to your newly created bill
                              iv.      Click the Pay Selected Bills button



              b.       QBO:
                               i.       Click on the plus sign
                              ii.       Under Vendors, click on Pay Bills
                             iii.       Check the box next to your newly created bill
                             iv.       Click Pay Bills


  • Create a credit
              a.       QBD: Vendors > Enter Bills > select Credit
                        QBO: Plus sign > under the Vendors header, click on Vendor Credit
              b.       Vendor = Employee’s vendor name
              c.       Amount = Cash advance amount
              d.       Account = Clearing Account
              e.       Memo = [Employee Name] Cash Advance


     
  • Check your work:
              a.       Go to Chart of Accounts and view the Employee Cash Advance account
              b.       Make sure that the Bill and Vendor Credit are both present
              c.       The account should have a zero balance




Apply Cash Advance Towards Employee's Expense Reports

Once the employee’s expenses have been exported to QBD/QBO, follow the steps below to apply the debit memo towards the user’s reimbursement.
 
  • In Tallie, configure your settings to export reimbursements as bills
         a.  Go to Settings
         b.  Click on Integration & Sync
         c.  Click on Export Settings
         
    d.  Select payment export type: Bill
         e.  Save


     
  • Export an expense report per usual
  • Once the bill has been exported to QuickBooks, go to Pay Bill
    a.  For QBD
              o  Pay Bill
              o  Set Credit
              o  Select a credit and click Done
              o  Click on Pay Selected Bills





    b.  For QBO
              o  Plus sign
              o  Pay Bills
              o  Select the bills you wish to pay
              o  Click on Pay Bills and any available credits will be applied automatically


     
  •  Note:
              o    If your employee spent more than the total cash advance, the excess will be paid with the bill.
              o    If your employee spent less than the total cash advance, the remaining credits can be kept to use later.