We’ve got an issue where we don’t have a corporate credit card, and we often have employees using their own credit cards to pay for items, which they then expense. Because we’ve wanted to issue POs and track the purchases, we established Bank Accounts for each of the credit cards, and we’ve let those balances accumulate without paying any attention. The employee has filed an expense claim (manually, not through ERP) and everyone has been happy.
We’re going to switching over our expenses and accounting systems to use ERPNext, so I need to figure out how we are going to handle Purchase Orders that are paid for by employees. I was hoping there was a way to have the expense claim balance with a bank account directly, but it doesn’t look as though that is possible.
Does anyone have any suggestions? I’m thinking we either need to change the account we use for Purchase Orders or we need to have the expense claim charge against the correct account (or do some journal entries to transfer between them).
Steps on how this scenario could be managed in ERPNext.
- Create an a Bank/Cash type of Account for an Employee (who makes payment) on the Liability Side.
- When making payment against Purchase Invoice, select Employee’s payment account instead of Bank/Cash account.
With this, liability will be booked against Employee Account which you can knock-off later by creating Journal Entry.
Yes, this is the workflow we are using for this situation. However, I want to improve the workflow so that the reimbursement for the employee is made through a payment entry instead of through a Journal Entry.
Do you have any suggestions about how to achieve this?
What we’ve done in this case is to create a payable account for each credit card.
Whenever we create a purchase invoice, we leave it as unpaid and “credited to” the corresponding credit card account.
At the end of the credit card period, when we make its payment, we create a payment entry for each purchase invoice.
This has worked for us in order to keep track of credit cards since it is quite easy to track purchase invoices.
He haven’t found a way to make a single payment entry to “kill” all purchase invoices since they belong to different suppliers. Therefore we have to create a payment entry for each supplier. Making it time intensive and error prone when reconciliating bank accounts.
Hope this works for you.