Welcome to knowing everything you may ever want to know about reimbursements, tracking them, and being reminded just how much your friend still owes you on that personal loan.
In This Article
- Handling Reimbursable Expenses
- Organizing and Tracking Your Reimbursements
- Tracking Loans to Friends and Family
Handling Reimbursable Expenses
There are two ways to handle reimbursements:
- Assign money for the initial expense.
- Temporarily overspending, then using the reimbursement to cover it.
(You'll notice some visual changes in the app since this video was recorded, but the method remains the same!)
How to Assign Money for the Expense Up Front
Assigning money for all your spending, even if it will eventually be reimbursed, is the simplest and safest way to handle reimbursements. If that reimbursement is late or never comes (yikes!), you’ll still be covered. Bottom line? Money left your budget.
- Budget for the entire purchase by assigning money to the category the expense is in.
- When you receive that reimbursement, categorize it to the same category you used for the expense.
- Check the Available balance in that category - that’s where the reimbursed money ended up! If you no longer need it there, you can move it to another category.
How to Overspend Temporarily
This method is only recommended when the reimbursable expense occurred on a credit card. Because money hasn't been immediately removed from your bank, you can let that overspending sit for a short time while you wait for your friend (or sister or boss) to reimburse you. Keep in mind your Credit Card Payment Category will be short until you get that reimbursement.
- Record the expense as usual.
- If you receive the reimbursement in the same month as the expense and you haven't made a credit card payment since recording the expense, categorize the deposit with the same category as the original expense. This will offset that expense, and money will be moved to your Credit Card Payment Category to be set aside for payment.
- If you receive the reimbursement in a future month or after you've paid off your card, the credit overspending will have been absorbed as debt into your credit card balance. Categorize the deposit back to the original spending category, and then move the money to your Credit Card Payment Category.
Using a Reimbursement Category
In most cases, a reimbursable expense (and reimbursements) can be categorized in a regular spending category, but if you prefer to separate out your reimbursable expenses, you can create a Reimbursement category to keep track of those expenses.
When you record the expense, use a split transaction to categorize the reimbursable portion to that Reimbursement category. When you receive the reimbursement, categorize it right to that Reimbursement category to offset the purchase. Keep in mind that once the month rolls over, overspending does not move forward, so just like the spending category, you'll have to move money to the Credit Card Payment Category if the reimbursement doesn't come the same month as the expense.
Organizing and Tracking Your Reimbursements
Looking for a way to organize and track your reimbursements so you know when to expect them—and if they have arrived? Even though negative amounts don’t roll over from month to month, there are several ways that you can track these reimbursable expenses without leaving your budget in the red! Here are a few we recommend:
A reimbursement is nothing more than a scheduled inflow transaction, so you can use the Scheduled Transactions feature to help you stay on top of them. You can schedule a transaction for the date you expect to have already received a reimbursement. When the transaction pops up for approval, you can either reject it if it’s already been reimbursed or use that as a reminder to follow up on the reimbursement.
If you will receive reimbursements for multiple expenses in one payment, record each as a part of a split transaction for that same future date.
When you make the initial purchase, you can use the Memo Field in the transaction to track the expense and reimbursement—for example, “Work Expense, Unpaid.” Searching for “Unpaid” will bring up all the transactions that are still awaiting reimbursement, and once you receive the reimbursement, you can change it to “Paid.”
You can name a flag "Reimbursements" to mark expenses that are awaiting reimbursement, and use the search field to find that flag (by either the flag's name or color). If you select all those flagged transactions, a total for all these expenses will show in the upper right corner, which makes it easy to know how much money you’re still owed!
Income v. Expense Report
If you use a Reimbursement category for all reimbursable expenses, and categorize the reimbursement inflows to the category, the Income v. Expense report will show the net total for that category. (If the reimbursement comes in a later month, the Total column on the far right is the best place to look, as this shows the net amount for all selected months.)
Dedicated Card for Work Reimbursements
If you are reimbursed for work expenses on a regular basis, it might help to have a credit card dedicated to those expenses—then all you have to do is check the current balance on the card to know how much your employer owes you!
You might find that one of the above options works well for work reimbursements, but you prefer a different one for personal reimbursements. You can even use a combination of methods!
Tracking Loans to Friends and Family
Sometimes, you may find that you are the one lending money to someone else. While there’s no specific feature for that in YNAB, we have a few suggestions!
- If you receive payments regularly, use a Scheduled Transaction. Create an inflow for the amount you expect to be paid on each specific date. When the transaction comes up in your register, you can either approve it or use it as a reminder to reach out to your friend or family member. 😉
- The memo field is great for keeping track of the total of the loan and how much is still owed. For example: “$1,000 Loan to Mike—Paid: $100 Owes: $900). As each payment is received, edit the memo to reflect how much is still owed.
- You could also set up a Tracking Account if the loan is long-term. Use the total loan amount as the starting balance (it should be an Asset, since money is owed to you), and make a transfer from the loan tracking account to your checking account when you receive payment. Once the balance of that tracking account is zero, the loan is paid in full!
Pro-Tip: As nifty as our Loan Planner is, you don't want to use a Loan account for loans that are owed to you. The Loan Planner is only for debt that you owe to a lender.