# Track Employee Loans & Advances in Payroll
**YouTube:** [How to Record and Track Employee Loans/Advances in Payroll?](https://youtu.be/fbt5oF6GDBA)
## How to Record and Track Employee Loans / Advances in Payroll?
In this tutorial, we will learn how **loans and advances** are recorded, calculated, and adjusted during **payroll generation** in **Logic ERP**. We will walk through the complete workflow—from setting up loan accounts to posting entries in Accounts and viewing loan reports.
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### **Create an Employee Loan Account**
#### **Steps**
* Navigate to **Setup Module → New Account Setup**.
* Enter the **Employee Loan Account Name**.
* Set **Account Type: Current Assets**.
* Click **Save** to create the account.
***
### **Issue the Loan Through Bank Payment (If Accounts Linking Required)**
#### **Why This Step?**
If payroll is linked with the Accounts module, the loan must be issued through a **Bank Payment Entry**.
#### **Steps**
* Navigate to **Accounts Module → Bank Payment Entry**.
* Enter:
* **Loan Amount**
* **Employee Loan Account**
* **Narration** (optional)
* Click **Save** to post the payment.
***
### **Record Worker Wise Loan Entry**
#### **Steps**
* Go to **Payroll Entry Module → Worker Wise Loan Entry**.
* Select the **Employee**.
* Define:
* **Loan Date**
* **Loan Amount**
* **Loan Tenure (in months)**
* System automatically calculates the **Monthly Installment**.
* Enter **Installment Start Date**.
* Keep **Loan Mode Type** as default.
* Map the **Loan Account Name** (for posting GL entries).
* Add **Narration** (press space key).
* Review and **Save** the loan entry.
***
### **Mark Employee Attendance**
#### **Steps**
* Open **Attendance Register Month Wise**.
* Select **Payroll Month** and **Employee**.
* Mark attendance for the full month.
* Save and close.
***
### **Generate Payroll With Loan Installment Deduction**
#### **Steps**
* Navigate to **Payroll Entry Menu → Payroll Generation**.
* Select:
* **Payroll Month**
* **Employee Name**
* Click **Recalculate**.
#### **System Output**
* The **Installment Amount** will appear under the **Loan Installment** column.
* The installment will be **automatically deducted** from the employee’s **Net Salary**.
#### **Loan Info Button**
* Shows:
* Total Loan Amount
* Paid Installments
* Pending Balance
* Repayment Details
* Installment amount can be edited if necessary.
* Click **Save** to store payroll details.
***
### **Post Payroll to Accounts**
#### **Steps**
* Open **Post Payroll to Accounts** window.
* Select **Payroll Month** → Click **Refresh**.
* The **Employee Loan Account** will appear as a **Credit Entry**.
* Click **Save Voucher**.
***
### **View Loan Posting in Ledger Report**
#### **Steps**
* Go to **Financial Reports → Ledger Report**.
* Select the **Loan Account**.
* Click **Generate Report**.
#### **What You’ll See**
* First loan installment posted automatically.
* Updated **Running Balance**.
* Each month, installments continue to post as payroll is generated.
***
### **View Employee-Wise Loan Details Report**
#### **Steps**
* Go to **Payroll Reports → Worker Wise Loan Report**.
* Select the **Employee**.
* Click **Create**.
#### **Report Displays**
* Total Loan Amount Issued
* Installments Paid
* Pending Installments
* Remaining Loan Balance
***
### **Record Early Loan Repayment (Advance Payment)**
#### **Steps in Payroll Module**
* Navigate to **Worker Wise Payment/Advance Entry**.
* Select **Employee**.
* Review previously paid installments.
* Click **New Entry**.
* Choose **Entry Type**.
* Enter:
* **Entry Date**
* **Amount**
* **Narration**
* Click **Save**.
#### **If Accounts Linking Is Enabled**
Record corresponding bank receipt:
* Go to **Accounts Module → Bank Receipt Voucher**.
* Enter the **Amount**, **Loan Account**, and **Narration**.
* Click **Save**.
#### **Verify in Ledger**
* Open **Ledger Report** again.
* Updated **Loan Balance** will reflect the advance repayment.
***
### **Conclusion**
Using these steps, you can efficiently manage **Employee Loans and Advances** in Logic ERP—from issuance and installment deductions to ledger posting and repayment tracking. This process ensures accurate payroll calculations and seamless synchronization with the Accounts module.
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