Employee Advance

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Overview

Employee Advance — Business Overview

Employee Advance is a Dafater document used to formally request, approve, and manage short-term cash advances given to employees. These advances help employees cover work-related or urgent personal expenses before regular payroll processing, while ensuring the business maintains proper control, transparency, and recovery of funds.

What Employee Advance Is Used For

Employee Advance supports day-to-day business operations by: - Providing employees with timely financial support for approved needs
- Recording advance amounts in a structured and auditable way
- Linking advances to employees for later adjustment through salary or reimbursement
- Helping finance and HR teams track outstanding advances and repayments

It ensures that employee advances are handled consistently, responsibly, and in line with company policy.

Prerequisites and Setup Requirements

Before using Employee Advance, the following should be in place: - Employees must be registered in Dafater with active employment status
- Clear company policies defining: - Who is eligible for advances
- Maximum allowable advance amounts
- Repayment methods and timelines
- Defined approval responsibilities (for example, manager and finance approval)
- Agreed approach for settling advances, such as salary deductions or expense adjustments

Having these basics ensures smooth processing and avoids disputes later.

Typical Workflow and Business Process Fit

  1. Advance Request
    An employee submits an Employee Advance request, stating the amount and purpose.

  2. Review and Approval
    The request is reviewed by the appropriate authority to confirm eligibility, necessity, and compliance with company policy.

  3. Disbursement
    Once approved, the advance is paid to the employee through the agreed payment method.

  4. Tracking and Settlement
    The advance remains open until it is recovered, usually through:

    • Deduction from future salary, or
    • Adjustment against approved expense claims

  5. Closure
    The Employee Advance is closed once the full amount is recovered.

This process ensures advances are controlled, documented, and properly settled.

Key Business Scenarios Where Employee Advance Is Essential

In all these cases, Employee Advance provides clarity and accountability.

Important Considerations for Users

Summary

Employee Advance plays a critical role in balancing employee support with financial discipline. By using this document correctly, businesses can offer flexibility to employees while maintaining accurate records, controlled cash flow, and transparent recovery of funds within Dafater.

Basic Information

Fields

Field Name Label Type Required Options Description
naming_series Series Select HR-EAD-.YYYY.- Auto-generated Dafater document numbering series for employee advances
employee Employee Link ✓ Employee Employee receiving the advance in Dafater
employee_name Employee Name Read Only - Read-only employee full name fetched from Dafater records
posting_date Posting Date Date ✓ - Date when the advance is officially recorded in Dafater
company Company Link ✓ Company Company under which the employee advance is issued
department Department Link Department Employee department responsible for the advance
currency Currency Link ✓ Currency Transaction currency used for the employee advance
exchange_rate Exchange Rate Float ✓ - Applicable exchange rate for currency conversion in Dafater
purpose Purpose Small Text ✓ - Business purpose or reason for requesting the advance
advance_amount Advance Amount Currency ✓ currency Total advance amount approved for the employee
paid_amount Paid Amount Currency currency Amount already paid to the employee
pending_amount Pending Amount Currency currency Remaining advance amount yet to be paid or settled
claimed_amount Claimed Amount Currency currency Amount adjusted against employee expense claims
return_amount Returned Amount Currency currency Amount returned by employee to the company
advance_account Advance Account Link Account Accounting ledger used to record employee advances
modeofpayment Mode of Payment Link Mode of Payment Payment method used to disburse the advance
repayunclaimedamountfromsalary Repay Unclaimed Amount from Salary Check - Indicates deduction of unclaimed advance from employee salary
status Status Select Draft, Paid, Unpaid, Claimed, Returned, Partly ... Current workflow status of the employee advance in Dafater
amended_from Amended From Link Employee Advance Original employee advance document this record amends

Permissions

Role Read Write Create Delete Submit Cancel
Expense Approver ✓ ✓ ✓ ✓ ✓ ✓
Employee ✓ ✓ ✓
DocType Relationship Module
Account Links to Accounts
Company Links to Setup
Currency Links to Geo
Department Links to Setup
Employee Links to Setup
Employee Advance Links to HR
Mode of Payment Links to Accounts