How to handle reimbursements
I've read the page on reimbursements, and understand that there are two ways to handle reimbursable expenses: (1) budget for the expense (using your money!), and then when you get reimbursed, budget as needed; or (2) temporary overspending.
I'm having a hard time understanding how the second option, temporary overspending, works. Do I budget nothing towards my "work" budget, let it go orange, and then when reimbursed, categorize it as inflow and put it all towards the credit card - but the "work" budget will stay orange?
I rack up anywhere from $100 - $1,000 reimbursable expenses per month - there's really no way to predict, so I can't easily budget for it. At the end of the month, I submit all my expenses for reimbursement; 2-4 weeks later, I get the reimbursement check. What's the best way for me to deal with this in YNAB?
Hi, Pink Pegasus
You do have a pretty good sense of how it will work. If you spend from an empty category using a credit card, it will go orange in the current month, and become cc debt as the month turns over if left unresolved . When you receive the reimbursement in the same month, inflow it directly to the category. YNAB pulls sufficient funds from that category (as soon as there are some available) and moves them to the cc payment category. No additional work reserving funds for the cc payment required.
However, if the reimbursement occurs in the next calendar month, you will have the added step of manually moving funds from your expense category to the cc payment category. (I'm assuming you will inflow the reimbursement directly to the category you used for the expenses so that reimbursements don't get added to your income in the reports.)
There is some detailed discussion on how the methods work in this thread: https://support.youneedabudget.com/t/x1ph10
I really prefer to use a pre-seeded category and tracking accounts, then use the reimbursements to replenish my categories. I really dislike seeing negatives and overspends in my budget.Reply
(I'm assuming you will inflow the reimbursement directly to the category you used for the expenses so that reimbursements don't get added to your income in the reports.)
This is where I'm having trouble I think -- when I categorize the reimbursement check deposit, do I (1) put into "inflow: to be budgeted" and then from my budget page, add it to my credit card budget category, or (2) do I put it into my "reimbursable work expenses" category?
Let's say I have $300 in work expenses in September. That category is orange and $-300.
When I go into October, that category (for October) is no longer orange - I guess that money has just been moved to cc debt? (How do I see this in my October budget??)
By October 10, I've racked up $150 in reimbursable expenses so far for October. I then get the reimbursement check for my $300 in September.
Where do I put that check? If I put it directly into "reimbursable work expenses" for October, what happens - how I account for the -$300 in September versus the -$150 currently in October?? Or do I put it into "inflow: to be budgeted" and then budget it to my cc, and just have a negative/overspend every month?
I really prefer to use a pre-seeded category and tracking accounts, then use the reimbursements to replenish my categories
What do you mean be pre-seeded?Reply
My biggest issue was keeping track of what I was owed. Sometimes there would be claims in process while I was incurring additional expenses, and that is where a tracking account really helped.
I created a tracking account (for an asset) named Next Expense Claim.
Using a credit card as an example, when I spend on my credit card, I enter it as a TRANSFER from my credit card account to my Next Expense Claim account, categorized to my office expenses category. I use the memo field to describe the vendor and item/service purchased. Doing this builds a registry of expenses owed to me. I can see at a glance just how much is currently outstanding (not yet claimed), and until I claim it and receive it, those funds are not in my budget to spend. The different coloured flags could be used to identify outstanding and claimed as well.
When I submit a claim and receive those funds as a direct deposit in my chequing account, I enter that as a TRANSFER from Next Expense Claim (tracking) account to my Chequing Account categorized as an inflow to office expenses category.Reply
See if you can locate a YNAB4 license and use it. It handles reimbursements more accurately that the web version of YNAB. If you need to use nYNAB, I would go with the temp overspend. I have similar expenses as you do and I'm typically reimbursed within a couple of weeks but I refuse to use my own money UNLESS it's a dire situation. If it occurs within the same month, it shouldn't be a problem. If it crosses months, you will have a mess.Reply
If it occurs within the same month, it shouldn't be a problem. If it crosses months, you will have a mess.
It crosses months -- all my September expenses, for example, are submitted at the same time on the last day of the month, and I get reimbursed 2-4 weeks later.Reply
I do the same thing as most of these guys do. I have a reimbursements category. When they pay me back, I add it to the reimbursements category. All expenses that are reimbursable also go into this category. What I would like to add is that I have a dummy account "Balance Transfers" just for balance transfers if money owed rolls over into the next month. I'll get the balance that they owe me and subtract it on the last day. Then on the first day of the next month, I add it in again. So now the reimbursements activity for this month is always how much they still owe me. Now, I don't have to look at past months to figure it out.Reply