Use this procedure when an employee pays you back with a check for an advance or other expenses (such as underwithheld taxes) that you've paid for.
Go to the Banking menu and click Make Deposits.
If the Payments to Deposit window appears, click Select None, click OK, and then continue with Step 3.
If the Make Deposits window opens, continue with Step 3.
In the Make Deposits window, choose the name of the employee in the Received From column.
In the From Account column, choose the asset account for this advance (such as Employee Loans).
In the Amount column, enter the amount of the payment.
If this payment is for a loan, enter the amount received toward the principal only.
If this is a loan payment, repeat Steps 2 through 4 for the interest part of the payment, but in the From Account field, enter the other income account used to track interest income.
Save the changes.
Alternatively, you can deduct the amount that the employee owes you from one or more paychecks.
Create a deduction payroll item for the loan repayment.
In the Liability account field, enter the same asset account you used for the loan or advance.
Select None as the tax tracking type.
Use this deduction on the employee's paycheck.