Title: Steps to Complete and Post a Cash Advance with Unanet Financials
There are certain setup steps necessary to use cash advances with employees who are reimbursed as vendors in Unanet Financials.
Two approaches for processing cash advances are outlined below: using a Journal Entry and using an Expense Report.
- When using a Journal Entry, the advance must be set up with a Payment Method that is reimbursable and the employee must charge advances to this Payment Method in order for the Financial Postings to occur as expected.
- When using an Expense Report, you can run the Expense Report with the cash advance through the regular approval process and post it to the General Ledger, rather than having it done via outside payment processing.
What’s covered in this document:
Create a Special Payment Method
Note: It may be helpful to set up a separate Advance Payment Method (as used in this example). This is not required as long as the user chooses a reimbursable payment method to use with the advances.
In Admin > Setup > Payment Methods, add a Payment Method called "Company Paid-ADVANCE." Make the Payment Method available for Expense Reports and set it to Reimbursable. This Payment Method must be used by the employee in the Expense Report, or the advance amount will not post properly to the General Ledger.
Ongoing Processing Steps
Payment of the Advance amount prior to spending using a Journal Entry.
Finance advances the funds to the employee prior to the travel or other needs. When an employee is paid an advance, it is typically entered through a Journal Entry as follows:
- Debit: Employee Advances
- Credit: Cash
The employee may optionally create an Expense Request and populate it with the amount of Advance requested. The Advance Expense Type will be created as specified below and used for recording Advances on Expense Reports. The Expense Request is then submitted for approval and will go through the normal approval steps as required by the Expense Report process. Finance can choose to be notified of Expense Requests by placing a Finance approval on all Expenses, or by doing a regular query of any Expense Requests in the REQUESTING status. The Expense Request, once approved, becomes an INUSE Expense Report and sits there until after amounts for travel or other items have been completed. At that point the Expense Report gets submitted for final approval.
If the employee does not create an Expense Request, then Finance will need to be notified of the employee's need for an Advance via some method outside of Unanet.
After the employee has spent the Advance, the Employee will reflect the spending of that Advance on their Expense Report. Note that if they initiated an Expense Request, this will be on the approved Request that is now an Expense Report. Here they need to select the Payment Method specially set up for Advances.
Technically, the employee could select a payment method other than the special Advance Payment Method. This can be avoided via training, monitoring and disapproving Expense Reports, or a Validation Stored Procedure to require that when the Advance Expense Type is used, it must be used in conjunction with the special Advance Payment Method.
Note: It may also be helpful to use a GL Export to summarize the advance balance by person.
Expense Report Cost Post
Post the Expense Report Cost so that the original Journal Entry Advance will be offset.
- Submit and approve the Expense Report.
- Run Expense Report Cost Post (Financials > Invoicing & Posting > Expense Report Cost Post).
The Expense Report Cost Post will credit the Employee Advances account, offsetting the original advance and resulting in a net amount of zero.
Create the Vendor Invoice from the Expense Report
- Create a Vendor Invoice from the Expense Report.
- Pay the Vendor Invoice.
When the Vendor Invoice is created from the Expense Report the system will know to reimburse only the portion of the expense report that is reimbursable and greater than the original advance.