Personal advances

A staff member asks for and is granted an advance for personal expenditure against future salary payment(s). The staff member will be asked to explain what the advance is for, to support the request, but will not generally be asked to account for how the money is spent.

The advance is either deducted in full from the next salary payment (when it is sometimes also called a salary advance) or, by prior agreement, may be repaid by the deduction of regular amounts from future salary payments over an agreed period (when it is sometimes also called a salary advance although it is more correctly a staff loan).

Policy

It can be difficult to set a workable and accepted policy for granting or refusing personal advances.

There are also financial risks in granting large advances which will be recovered over a number of months as they may be difficult or impossible to recover, if the staff member leaves the organisation or the programme closes before the advance has been repaid.

A policy of never granting personal advances may create far less ill feeling than a well-intentioned system of allowing them. One alternative for lower paid staff who have difficulty budgeting on a monthly salary is to pay their salaries weekly or fortnightly.

Approval and accounting

If personal advances are given, many problems can be avoided by making sure that:

Requests for all personal advances are considered by one designated staff member; this will often be the programme manager.
A staff member granted a personal advance, signs the advance regulations before receiving the advance and signs a receipt for the advance which details how and when it will be repaid.
Payment and recovery of approved personal advances are made by the same staff member who pays the salaries.
Details of all personal advances and their agreed repayment dates are recorded in a personal advance register which is kept in the file or system used for paying salaries. This is so that they are recovered as agreed.