Advance to employee

An advance to an employee is funds forwarded to an employee by an employer, with the expectation that the funds will be repaid. Advances to employees are considered current assets, since the usual expectation is that repayment will occur within one year. The ability of employees to repay should be evaluated at regular intervals; if there is an expectation that an advance will not be repaid, it should be written off at once.

Alternatively, an employee can forward documentation regarding how an advance was spent on company business, in which case the advance is charged to the expense indicated by the documentation.