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ranjocontractors
September 23, 2026
Question

Employee Advances and Reimbursements

  • September 23, 2026
  • 1 reply
  • 11 views

We have QuickBooks Desktop Premier Contractors Edition 2018. I’ve just recently taken over the accounting for my company and I believe the previous office manager was not correctly recording the employee advances and employee reimbursements so I need clarification on the correct way to record everything. Additionally since we are a contractor we need to allocate the expenses to the job. This is not a part of our payroll. 
 

So, we gave John Smith $300 cash on 7/1/26.

He brought back 4 receipts. 3 for $80 each for C&B Crushing for Job A and 1 for $106.37 for Waste Management for job B. That leaves a difference of an additional $46.37 he paid personally. We wrote a check (#123) for this difference. 
 

Originally the previous office manager would just record the receipts given from the employee under the employee center as the expenses they were such as hauling away but would not allocate anything to a job or to the vendor the receipts were from. Can someone help with the proper steps and checking the accounts clear, etc. 

 

1 reply

john_TQuickBooks Team
QuickBooks Team
September 24, 2026

To properly record employee advances and reimbursements in QuickBooks Desktop Contractor Edition, record the advance separately from the expenses, then enter the receipts with the correct vendors and Customer assignments so your job costing remains accurate.

 

First: Set up an Employee Advances account (if you do not already have one).
 

  1. Go to Lists then Chart of Accounts.
  2. Press Ctrl + N to create a new account.
  3. Select Other Account Types > Other Current Asset, then select Continue.
  4. Name the account Employee Advances and Save and Close.
     

Then, Record the initial $300 advance to John Smith.
 

  1. If the money was paid from petty cash, record the decrease in your petty cash account. If it was paid by check, go to Banking > Write Checks.
  2. Enter John Smith as the payee.
  3. Enter the date and amount of $300.
  4. On the Expenses tab, select the Employee Advances account.
  5. Save and Close the transaction.

 

This records that John received funds that need to be accounted for once receipts are submitted.
 

Lastly. record the receipts, assign the job costs, and record the reimbursement.
 

  1. Go to Banking > Write Checks and create check #123 to John Smith for the remaining $46.37.
  2. On the Expenses tab, enter the expenses, C&B Crushing: $240.00, assigned to Job A, Waste Management: $106.37, assigned to Job B
  3. Enter the appropriate expense accounts and vendors for each receipt.
  4. Add a line for the Employee Advances account for -$300.00 to apply the original advance.
  5. Verify the total check amount equals the remaining reimbursement amount of $46.37, then Save and Close.

 

After these entries are completed, the employee advance should be cleared, and the expenses should appear under the correct jobs for job costing reports.
 

Since this involves correcting historical entries and affects job costing, it may be helpful to confirm the account setup with your accountant before changing previous transactions.

If you have any further questions, feel free to reply to this thread.

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