Was this page helpful?
Thank you!

Comments or suggestions?



Enter Email Address (optional)
email

Selling products or services to employees and deducting payments from their paychecks

In order for employees to purchase products or services and make payments with a payroll deduction:

  1. Add the employee as a customer to the Customers & Jobs list. Use a nickname or put a -C after the name to designate this as a customer name, distinct from the employee name.

  2. Create an Other Current Asset account and name it appropriately, such as Employee Purchase Asset.

  3. Create a discount item to use on invoices:

    1. Go to the Lists menu and click Item List.

    2. Click Item at the bottom of the list and click New.

    3. Click the Type drop-down list and choose Discount.

    4. In the Item Name/Number field, enter a name, such as Employee Purchase.

    5. Enter a description in the Description field if desired.

    6. Leave the Amount or % field as 0.00.

    7. Click the Tax Code drop-down list and choose Non.

    8. Click the Account drop-down list and choose the Other Current Asset account created in step 2.

  4. Create an invoice for the customer (employee) created in step 1:

    1. Go to the Customers menu and click Create Invoices.

    2. Add the services or items purchased by the employee/customer on the invoice.

    3. Write down the Balance Due that appears at the bottom of the invoice.

    4. On the next item line in the body of the invoice, add the discount item created in step 3, and enter the amount as the entire amount of the invoice noted in step 4c above.

    5. The balance on the invoice should now be $0.00, but the Other Current Asset account created in step 2 will increase by the amount entered for the discount item in step 4d.

    6. Click Save & Close to record the invoice.

  5. Create a payroll deduction item:

    1. Go to the Lists menu and click Payroll Item List.

    2. Click Payroll Item at the bottom of the list and click New.

    3. In the Add New Payroll Item window, choose Custom Setup. Click Next.

    4. Choose Deduction and click Next.

    5. Enter a name such as Employee Purchases and click Next.

    6. Click the Liability Account drop-down list and choose the Other Current Asset account from step 2.

    7. Click Next four times. In the Gross vs. net window, select net pay. Click Next.

    8. Leave the Default Rate and Limit fields blank. Click Finish.

  6. Next time you create a paycheck for this employee, add the payroll deduction item created in step 5 in the Other Payroll Items area of the Preview Paycheck window. If the employee is paying the full amount in one payment, enter the amount of this item as the amount noted in step 4c. Click Create to save this paycheck. Now, the Other Current Asset account from step 2 should have a zero balance. If the employee is making more than one payment, use this item on as many paychecks as needed to result in a zero balance in the Other Current Asset account.

Notes

  • After all payments have been made by the employee, if the Other Current Asset account results in a negative number, then either the deduction has been tracked from the paycheck without tracking the invoice, or too much was deducted from the employee paycheck.

  • After all payments have been made by the employee, if the Other Current Asset account results in a positive figure, either the invoice was tracked without tracking the deduction from a paycheck, or too little was deducted from the employee paycheck.

KB ID# H_PAY_SELL_PROD_SRVS_EMP
12/4/2016 6:18:09 AM
QYPPRDQBKSWS09 9138 Pro 2017 cf27c7