Handling Reimbursements?

Hello YNABers!

I was wondering how you might handle business reimbursements in YNAB. To date, I have used a credit card I have with no personal debt attached to it as my designated "business expense" card. Transactions from my bank are synced and I categorize those business expenses as "reimbursements" in my budget.  End of the month rolls around and I'm reimbursed.  I allocate the income to the reimbursement line item and it's cleared. Pretty straightforward except....

 

I don't budget for the transactions in my reimbursements line so I'm stuck with a "Overbudget" warning every month!

 

Is there another trick you all might use to handle reimbursements and keep your budget clean of warnings?

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  • Perhaps this thread will help you:

    https://support.youneedabudget.com/t/x1ph10/reimbursed-business-expenses

    It has a lot of ideas. Personally, my husband gets reimbursed nearly as quickly as he turns in receipts, so I go ahead and put in the reimbursement, waiting to clear it until it actually clears. My reimbursements are planned and take longer, so I save up for them, then treat the reimbursement as income.  I might recategorize as a negative expense next time, though. We'llsee.

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  • Hi flame3912 !

    How to handle reimbursements is an important topic, so a section of our Help Docs is dedicated to it. 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.

    It sounds like you're currently doing option two. 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 - and it avoids the overspending warning. :)

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  • Yes I figured this may have been the best case scenario. I suppose I was looking for a way to avoid the overspend warning/notification but it seems there is no way around that. 

    Could I forgo this all together by excluding the business transactions and reimbursement amount from my budget when it arrives effectively making it seem to ynab as if business transaction don’t exist? My thought here is that our expense system tracks that for me so I can handle this business outside my personal budget. 

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    • Hi flame3912 ! If those business transactions are happening in your personal, on budget accounts, you'll want to make sure that your accounts reflect reality—and include those. That way you won't run into trouble when you reconcile your accounts!

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  • So would there be a way to handle business transactions on a personal card while not having a temporary overspend warning? At this point, it doesn't *seem* like it, so I was trying to find workarounds. I really hate having an overspent category that has nothing to do with my personal finances.

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    • flame3912 Since those funds have left the budget, even though only temporarily, that category will show as overspent. The only way to prevent that overspending warning is to budget for the spending. If you use a credit card, the overspending won't subtract funds from your budget when the month rolls over, but the warning will still be there.

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    • Faness  is there anything on the roadmap to handle this a bit more elegantly? Notification fatigue is a real thing and I suspect it's going to have a noticable impact for those of us with this use case.

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    • Hi Hot Pink Mermaid !

      We don't have a public road map of future features, but this isn't a feature currently in development (or listed on our What’s Up Next page). We're working on a way to make future features and the feature request process more transparent, but you can still submit a Feature Request to let our development team know exactly how you'd like to see reimbursements handled.

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  • flame3912 something that can help is to keep a buffer budgeted for reimbursed expenses that is roughly the average of your business/work spending each month. You don't want to be caught if the reimbursement doesn't come in on time and you need to pay the bill. I made a video about how it can work this way, here: https://www.loom.com/share/73b8099012124880a3a1dfa1410e4c31. This way you don't have any underbudgeted alerts and never have to worry about the reimbursement not coming through on time. There isn't any audio, but hopefully it will be clear enough. If you have any questions, just let me know.

    If you don't have enough spare $$ in the budget to fund a buffer line, well... you really should leave the alerts there or budget for expenses as they come. You could "pre-enter" the reimbursement so that everything nets out to $0, but that is dangerous if you have an unexpected large expense *or* the reimbursement doesn't come before you need to pay the bill.

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  • flame3912 I feel your pain. Same here. I do not like seeing those overspent accounts, but right now I'm not going to budget dollars to do a job that doesn't need doing for another 30-60 days.

    YNAB ignores the 30-60 day credit card "float" for a good reason, because the built-in YNAB bias is to budget all expenses when accrued. It's a more conservative approach and, if followed, it promotes avoidance of the all-too-common problem of people overspending with credit cards.

    But for us, tracking and reimbursing ourselves for our business expenses, we count on that 30-60 day float. We *know* for certain we will be reimbursed (by ourselves) before next month when we need to pay the credit card statement balance from the previous month. So we're going to see those bright overspent colors in those categories. Personally, I'm getting used to ignoring them.

    I do recognize YNAB is built for personal budgeting. Not for business budgeting. Not even for personal, closely-held, sole proprietor "it's just me" business budgeting. So I'm resolved to do what I need to do to make it work.

    Eventually, I might budget those amounts, even though it will tie-up capital perpetually (in roughly the amount of our average monthly expenditures). Maybe I'll consider it my Emergency Rainy Day Cash Flow Crisis Management Ermahgerd Reserve.

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