Credit card for work expenses in YNAB?
I've been using YNAB for a bit less than a month, and I feel like I'm running into some obsticles along the way.
I travel a bit in my work, and I have a credit card that I use when buying tickets, paying for hotels and dining out while travelling. The money that I spend is returned to me the following month together with my salary, and then I immediately pay my cc-bill in full.
I tried adding the credit card to my budget, but it sort of makes a real mess. I haven't budgeted for any of these expenses, but I know I'll pay the bill when my paycheck comes in. So now it's just orange numbers all the way.
Should I just leave the whole thing out of my budget? Part of the reason I put the credit card in there is to get a visualisation of what part of my paycheck is my salary, and what part is just travel expenses returned to me.
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Hi Silyey !
We have two recommended ways of handling reimbursements - either budgeting for the expenses with your own money or floating the expenses on a credit card. It sounds like you're using the latter approach and that's okay! Since you don't plan to pay for those expenses with your own funds, you can leave them orange in your budget. When you receive the reimbursement, you'll use those funds to cover your credit card payment, just as you described.
How to handle reimbursements is an important topic, so a section of our Help Docs is dedicated to it. Be sure to check out the Help Doc to learn more, but here's a quick summary in the meantime:
The negative orange numbers in your budget are used to indicate credit overspending. Temporary overspending is only recommended when the reimbursable expense occurred on a credit card because money hasn't been immediately removed from your bank.
When you receive the reimbursement, categorize it to the same category used for the expense. This will also help keep your reports happy since your spending will be offset by the amount of the reimbursement.
Once you've categorized the reimbursement, be sure to check the Available balance in the spending category—that's where the reimbursed money ended up! If you no longer need the money in that category, you can move it to another category.
If you choose to temporarily overspend, check the amount in your Credit Card Payment category after the reimbursement, too. If the purchase and reimbursement were in the same month, the reimbursed funds will move automatically back to the Credit Card Payment category. If the month has changed, they won't move automatically, so you'll need to move them to the Credit Card Payment category yourself.
Let me know if you have any questions about that! :)
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Thanks for the thorough answer! I will recieve my reimbursement this Friday, so I'll be excited to see if I can make sense of my budget after I've categorized it. :) (And to make it more complicated: I usually don't recieve the exact same amount, because I recieve food allowance (is that the right word?) when travelling, and usually I spend more or less money on food than the exact amount of the allowance...)
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While I agree reimbursements can be a challenge, in this case I do keep my husband’s business card OFF budget (tracking). It’s the ONLY tracking account I have. Since his trips rack up a whole bunch of charges I could never possibly make sense of, they all go on there.
When he gets a reimbursement it gets categorized straight to the Business Expense category (not TBB) and when I pay the card it gets categorized as Business Expense in the transfer out of the on budget checking account. In the rare occurrence that we use the card for something not business related (either by accident or for some promotion) I flag it and use a split transaction when I make the payment.
Reimbursables on-budget are still an issue and YNAB and others on the forum have various strategies for working with them. But if everything is on a separate card, you might want to consider the tracking account option as it has been working well for us for over a year now.
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Annieland Ah, good input! Sometimes the expenses that follow my business trips are quite gigantic, and right now there is no way I can budget for this with my own money. So in that way it would make sense to just track it (which I guess is a category you choose when adding an account to YNAB?).
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Silyey Yup! In a single category in our case. That way I don’t worry about the mounting expense until I actually have to pay the bill (and hopefully have received the reimbursement by then). If any money is left over in the category (like an unused per diem), you can either leave it in the category in case you need to cover any expenses in on-budget accounts, or just release it back to TBB and move to any category you want. Yay free money! :)
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It sounds like this is a card that is dedicated to business use. Annieland 's suggestion is by far the way to go in that case. The only pain-point is the reallocation from the reimbursement category to the CC Payment category.
Contrary to the official documents, using the same category for both inflow and outflow causes the net spending to be $0 in reports. The inconsistent advice you'll see in those docs will often skew reports (inflating both expenses and income totals).
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dakinemaui But in my workflow, there never is a CC payment category transaction because the CC is off budget. Yes, reports net zero, which is what I prefer. If there’s a month crossover either way, I do exclude the card and reimbursement category from the report as appropriate.
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Annieland Quite right -- I managed to forget that between the 2nd and third sentences! 😆
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dakinemaui It`s a dedicated to work, yes. I’m not allowed to use it for anything else, and I’m not personally responsible for it.
(I didn’t quite get that second part, sorry. But I’ll read it again to see if I do.)
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I have a reimbursable expense line under my Work related category for Per Diem, cab fare, business lunches, and other things that I know will be covered in my monthly expense reports. I use a personal credit card for all of this spending and leave this line in my budget orange until the reimbursement check comes in. I then slate all of that deposited check to that specific category instead of To be budgeted. I also have a tendency to spend a little more on food and drink while traveling than the Per Diem covers so when I come back I do my expense report and anything higher than the number on my report gets covered from my personal budget leaving the exact amount of the incoming check orange.
Something I discovered that helped me last month, while still getting used to YNAB in trial mode, was I submitted my expense report for Aug on Sep 2nd, received it Sep 6th and when I put the money in the Sep Budget line for work related it did some crazy stuff that messed me up. So instead of trying to sort that all out I just back dated the deposited reimbursement check to Aug 31st and slated the money to the budget line in the Aug budget instead of Sep which seems to set everything right again. Now this only works for me because the CC payment isn't due until the 13th-15th of the month after used the card so I get the money to cover the spending before the payment is due.
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Wizard Yes! That sounds like me (both spending more than the Per Diem (learned a new word today!) and the way I solved it), and this is how I did it. I have a category called travel expenses (work), and an account for my cc. Hopefully it will all magically work out on Friday. I also budgeted the reimbursement part of my salary to go straight to the travel category instead of TBB. But I’m not sure how that will play out in YNAB once the money comes in.
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Silyey If it works the same in yours as it did mine, the categorizing of the reimbursement income/deposited check straight to the work category , then it should equal $0 (Once the over spending is covered from personal funds anyways LMAO) Oh and I'm glad I could teach you a new word! LOL
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Wizard I actually think I’m on the positive side this month, but just because of my mileage reimbursement (which I think is a term...?). Well. Anyway. Good to know that it will work out! :)
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Silyey Unlike typical reimbursements, you should never have a negative category. The outflow that hits your budget is the CC payment. This always happens AFTER the inflow.
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dakinemaui Meaning I should not have an orange category for my travel expenses? (As this picture below shows.)
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Silyey - Annieland described an approach where your work CC -- not in YNAB -- has charges. The company gives you money to pay the work CC which hits your checking account -- which is in YNAB. Thus, the first thing as far as YNAB is concerned is the inflow. So no, you would not have a negative/orange category if you were using this approach.
@Now, you don't seem to have things set up like that at the moment, and I'd suggest that you switch to the easier approach just described. It would appear the work CC is an account in YNAB, and you're recording those charges as you go. If that's true, then in order to switch:
- Delete any recent transactions in the Work CC account that you have NOT submitted for reimbursement.
- When the next reimbursement comes in, categorize that to the Reiseutgifter category.
- Move enough from Reiseutgifter to make the Work CC Payment category Available cover the entire account balance. (YNAB may have already done some of this behind the scenes.)
- Move anything else in Reiseutgifter to TBB, and then anywhere else you'd like. (It's due to excess per-diem.)
- Pay the Work CC the entire amount in the Payment category and record this as an uncategorized transfer/payment.
- Close the Work CC account
Thereafter, just record the reimbursement and the CC payment to the Reiseutgifter category, leaving the individual work transactions out of YNAB entirely. (Just two transactions per expense report.)
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dakinemaui Thank you for explaining! I’ll try doing this the upcoming month.
This means I’ll just «ignore» the transactions I make on my work CC? (I enter everything manually anyway, nothing is linked.)
I’m feeling a bit slow in understanding this, sorry! But hopefully I’ll get it when I actually do it myself.
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Silyey said:
This means I’ll just «ignore» the transactions I make on my work CC?With the new/simpler approach, in a manner of speaking, yes. You deal with them in bulk, wrapped up in the single CC payment.
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Silyey said:
I also budgeted the reimbursement part of my salary to go straight to the travel category instead of TBBTerminology alert (to avoid confusion about how others read what you wrote): it sounds like you actually categorized money to the Travel category when recording that inflow transaction. (And this is the correct thing to do, so a later outflow, categorized to Travel as well, will net to $0.)
"Budgeting" is something entirely different, even though both increase the amount Available in a category.
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dakinemaui Sorry. Completely confused. I added the upcoming transaction of me receiving my salary and reimbursements like this (yes, it’s partly in Norwegian. You hopefully get the picture). Can I do that, or should everything stop by TBB first?
Edit: So categorised, not budgeted. Copy that. ;) -
Silyey Yep, the first two are directly "categorised", which is perfect for the work reimbursement. The subsequent CC payment is recorded as an outflow categorised to that same category. (There is no account for this work CC in YNAB, so you treat it much like any other bill.)
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A small update:
I recieved my reimbursement, payed off my credit card and closed the account in YNAB so it doesn't get mixed up in my "regular" budget.
For my upcoming trip, this week, I'll try something new that I picked up on the FB-page ('cause I'd still like to be in control of my spending while travelling for business): I made a whole new budget just for my trip. I made an inflow transaction equal to the the Per Diem-amount and categorized it as "Dining out"-money. That way I know I won't spend more than I recieve. I'll be testing in on this relatively short trip, to see if this is something I can use on longer and more complex trips.
