Handling Salary Advances/Loans and deduction in Tally.ERP9

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Tally.ERP9 helps you track Salary Advance/loans given to employees and provides the flexibility to specify simple to complex criteria for Recovery of Salary Advances or loans viz., Flat or manual deduction, and provision of lump-sum loan recovery and so on.

Tally.ERP9 also allows you to generate a Month wise break-up report for the amount of loan disbursed, recovery of installments made, and balance amount of Loan / Salary advance.

Tracking of Salary Advances / Loans paid to employees are done by following the steps given below:

  1. Creation of Masters
  2. Modify / Alter Salary Details
  3. Payment of Salary Advance
  4. Recovery of Salary Advance
  5. Creation of Masters

Tally.ERP9 allows you to create different ledgers for different types of Loans / Salary Advances. Create the following ledger:

Ledger Creation

  1. Create Salary Advance Ledger

Go to Gateway of Tally > Payroll Info. > Pay Heads > Create

  • Type Staff Salary Advance in the Name field
  • Select Loans and Advances in the Pay Head Type field
  • Specify the group as Loans and Advances (Asset) in the under field and press Enter
  • Set Affect Net Salary to Yes
  • Type Staff Salary Advance in Name to Appear in Salary Slip field
  • Select Flat Rate in the Calculation Type field

The completed Staff Salary Advance Ledger creation screen is displayed as shown:

Ledger Creation Screen

  • Press Enter to accept.

2. Modify / Alter Salary Details

In order to deduct installments or lump sum recovery of Salary Advance from the monthly salaries of the employees, it is essential to include Salary Advance / Loans ledgers in the Salary Details master of the employees.

Follow the steps given to update the Salary Details masters of the Employees:

  • Go to Gateway of Tally > payroll Info > Salary Details > Alter
  • Select Kumar from the List of Groups / Employees and press Enter, the Salary Details Alteration screen appears.
  • In the Salary details alteration screen, tab down to the last line and select staff Salary Advance ledger in the Payhead Field.
  • Select End of List and press Enter

The completed Salary Details screen is displayed as shown:Salary Details Alter

 

  • Press Enter to accept.
  1. Payment of Salary Advance

In Tally.ERP 9, you may disburse the Salary advance / Loans to Employees using a Payment Voucher as shown:

Example: In July 2019, the company paid salary advance to following employees with the mode & amount of recovery.

Employee Details

Altering the salary details of Rahul & Kumar mention Rs. 5000 & Rs.1500 respectively in the Rate Field as it is Flat Rate.

Emp'e Salary Details

The same is accounted as shown.

Create a Payment Voucher

Setup:

  • Press F12: Configure and set Use Single Entry mode for Pymt/Rcpt/Contra to No
  • Go to Gateway of Tally > Accounting Vouchers > Payment Voucher (F5)
  • Press F2 to change the date to 01-07-2019
  • In the Dr field, select Staff Salary Advance ledger from the list of ledgers

Payment Voucher

 

  • Specify Rs 13000 in the Dr Amount field and press Enter, the Cost allocation for subscreen appears
  • Select Primary Cost Category in the Employee Category Field
  • Select the required Employees Rahul & Kumar from the list of Cost Centres and Press Enter

Cost Centre Allocation

  • Specify 10000 in the Amount field
  • Similarly, select other Employee (Kumar) from the List of Cost Centres and specify the amount (i.e., 3,000)
  • The Completed Cost Allocation for subscreen is displayed as shown:

Cost Centre Details

 

 

  • Press Enter to accept and go back to the Payment Voucher main screen
  • Select ICICI Bank in the Cr field and press Enter
  • Press Enter to accept the Amount
  • Type the details of the transaction in the narration field
  • The completed Payment Voucher for Salary Advance is displayed as shown:

Payment Screen

 

  • Press Enter to accept
  1. Recovery of Salary Advance

In Tally.ERP 9, you may deduct or recover Salary Advance / Loans from Employees in Installments by defining the criteria for deduction while creating the Salary Advance Pay Head; i.e., Flat rate or manual deduction by specifying a user-definable amount.

To recover salary advance/loan, follow the steps given below:

Process the Attendance Vouchers for the month of July 2019

Attendance details for July 2019

Attendance details

 

Attendance Entry recorded is shown below.

attendance Screen

Create Payroll Voucher

  • Go to Gateway of Tally > Payroll Vouchers
  • Press Ctrl+F4 for Payroll Voucher
  • Press F2, specify the date as 31-7-2019 and press Enter
  • Press Alt+A (Payroll Auto Fill) to prefill employee payroll details

               In the Employee Filters screen,

               Select Salary in the Process for field

               Specify 1-7-2019 in the From field

               Specify 31-7-2019 in the To field

               Select All Items as Employee/Group

               Select Salary Payable in the Payroll Ledger field

  • Voucher automatically calculates the staff salary advance since it is mentioned as Flat Rate.Payroll Voucher

 

  • Press Enter to accept the screen.

Note: User can use the interest calculation feature to calculate the EMI for each month, and set the Calculation Type as Flat Rate to recover the amount.

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