How to handle CC reimbursements
I haven't ever found a good method of doing this in YNAB and I consistently have reimbursements for my work and I don't want them tangled up in our other budget line items. Here's what I've done:
- I created a line item in my budget where I ONLY enter expenses that will be reimbursed.
- When I receive the reimbursement check, I code it to that line item so I know it was paid back to me.
When I go to make the payment on my CC, though, nothing is correct. If I pay out of the reimbursement line item, it doesn't adjust my CC line item as having received a payment. If I pay from the CC line item, it doesn't adjust my reimbursement line item.
I'm used to using Quickbooks Online to manage client's info like this and YNAB just doesn't seem intuitive in this area. Maybe I'm just missing a huge piece that will make it all click.
Hey Gold Falcon ! Great question! A section of our Help Docs is dedicated to reimbursements. Here's a quick summary, and you can follow the link to learn more!
There are two ways you can handle reimbursements in YNAB:
1. Budget for the initial expense, then treat the reimbursement as income.
2. Temporarily overspend, then use the reimbursement to cover it.
Budgeting for all your spending, even if it will eventually be reimbursed, is the best way to handle reimbursements. If that reimbursement is late (or never comes), you're covered.
Temporary overspending is only recommended when the reimbursable expense occurred on a credit card, since money hasn't been immediately removed from your bank. Our Help Docs explain how to handle the reimbursement based on whether you receive it in the same month or a future month.
Let me know if you have any questions!
I don't want to budget for the expenses, as they vary all the time (I use my card as an operations director at our church and expenses can sometimes be in thousands). So, I do the second method. I'm just confused as to how it integrates with my CC payment line...nothing really makes sense and I handle accounting for several businesses.
The short answer is that unfortunately YNAB doesn't have an easy way to work with reimbursable expenses. Do a quick forum search and you'll find LOTS of disgruntled conversations about it. They still seem to not be able to cope with the fact that some people need to function on reimbursable situations where they aren't going to use their own funds to budget for it ahead of time "just in case you never get reimbursed". 🙄
My latest thought on this is to create an account that has an amount in it that reflects an amount of available credit on a credit card. Spending would deduct from this amount, but reimbursements would bring the account back up to the correct total available credit.
This would only really work if you use ONE credit card to put ALL reimbursements on, and have no other transactions on that card. This is how I would personally handle it just to keep things straight in my head and for accounting purposes anyway. But I tend to like to keep my piles of money nice and neat when I have to work with various situations (which is why I run 3 budgets...).
I'm not sure that helps at all. I'd love to hear it if there is a better solution.