Employee should be treated as Vendor or Customer?

Question

Hello,
Employee should be treated as Vendor or Customer?
Loan payment and advance given....how can we handel it????
Thanks

Answer 1

Hi Pari,
In Conpany's point of view, all Employees should be treated as Vendors.
Loan Payment and Advances sould be treated as Other Special GL Transactions for Vendors.
Steps to be followed:
1. Define Alternative Reconciliation Account for Vendors (Here Employees)
Path: IMG/FA/ARAP/Business Transactions/Postings with Alternative Reconciliation Account/Other Special GL Transactions/Define Alternative Reconciliation Account for Vendors
Here you can create Special GL indicator for Loan Payment or Advances: Click Create (F6) and create special GL indicator (L) for Loan to Employees and save the data
DC on the Special GL indicator: L - Loan payment
Here give the following inputs:
In Recon.acct: Give Recon A/c for Vendors (Employees) (B/S A/c - Liability Group) Ex. A/c No.1000
In Special GL account: Give Alternative Recon. A/c to Employees i.e. Loan to Employee A/c (Create this a/c in FS00).  (B/S A/c - Assets group). Ex. A/c No. 3000
2. Go to F-02 and post the entry.
Entry will be:
Employee A/c Dr
To Bank A/c
Entries in General Ledger View:
Alternative Recon. A/c for Employee A/c Dr.  (In our example: A/c No. 3000)
To Bank A/c
Note: If you want to deduct TDS, then follow the same procedure for WT for Vendors for Payments.
In this case the journal entry will be:
Employee A/c Dr.
To Bank A/c
To Withholding Tax A/c
To Sur charge A/c (if any)
To Education Cess A/c (if any)
Hope this helps you.
Regards,
Kannusamy S