Managing advances

An advance puts company money in an employee's hands before anything has been spent. Managing them well is almost entirely about the back half — making sure every disbursed advance is eventually liquidated.

Where: Expenses › Advances You need: expense rights covering the requesters, and the right to disburse

The lifecycle

pending  →  approved  →  disbursed  →  to be liquidated  →  liquidated

with declined and cancelled as exits, and two payment states — disbursement in progress and disbursement failed.

Status	Means
Pending	Awaiting approval
Approved	Agreed, not yet paid out
Disbursement in progress	Payment under way
Disbursement failed	Payment did not complete — needs attention
Disbursed	Money is with the employee
To be liquidated	Awaiting the employee's account of the spend
Liquidated	Settled
Declined / Cancelled	Not proceeding

The number that matters

⚠️ Total disbursed but not yet liquidated is company money outstanding with employees. It is the one figure in this module worth watching every week. Nothing prompts you — an advance can sit in to be liquidated indefinitely without anyone noticing.

An advance is not an expense until it is liquidated. Until then it is a balance, and the older it gets the harder it is to substantiate.

Approving an advance

The estimate is what you are agreeing to. Configuration can allow an advance to exceed the sum of estimated claims, but the default position is that it should not — if someone needs more, the estimate was wrong and is worth a conversation before the money moves.

Check:

Is the purpose specific? "Travel" is not a purpose; "Cebu client kickoff, 3 days" is.
Does the employee have an advance outstanding already? Stacking advances on someone who has not liquidated the last one is how balances become unrecoverable.
Is the amount proportionate to what is actually being done?

Liquidation

When the employee submits their receipts, you are reconciling three numbers: what was advanced, what was spent, and the difference.

Outcome	Action
Spent = advanced	Liquidate
Spent < advanced	Recover the balance, then liquidate
Spent > advanced	The excess becomes an ordinary claim

Receipts are checked against the expense type's rules exactly as a claim would be.

What Happens Next

Disbursed advances create a balance against the employee until liquidated.
A failed disbursement leaves the advance approved but unpaid — it needs resolving, not resubmitting.
Unliquidated balances follow the employee, including into final pay if they leave.
Liquidated advances land in your accounts through the expense types the receipts were claimed against.

Tips

Review disbursed-but-not-liquidated every week. This is the single most valuable habit in the module.
Set an expectation for liquidation — a number of days after the activity — and say it when the advance is approved, not when it is overdue.
Do not approve a second advance for someone with an unliquidated first, unless you have a specific reason. It is how small balances become large ones.
Chase failed disbursements the same day. The employee is expecting money that has not arrived and may be funding the activity themselves.
Check leavers for outstanding advances before final pay. After they have gone, recovery is a legal matter rather than a payroll one.