Refunds

MizzTeri

I'm using Q to track charges from a facility & my checking acct. The facility issued a refund but I already paid the bill. How do I handle this? It seems it needs to be a credit in both accounts but Q won't let me do that.

Chris_QPW

In real life do you have both a facility account?
Exactly how was the payment made?
Exactly where was the refund credited to?

MizzTeri

Yes, I have an account set up for the facility and one for checking. The facility charges are paid by check each month so I do a Transfer fro, checking to facility (hence, a deduction from checking and a credit to facility). The refund was a check sent directly to me which I deposited into checking. I tried to do this as a Transfer from facility to checking but I don't think that was the correct way to handle this.

splasher

I would leave the facility account as is and deposit the refund into the checking account and use the appropriate category of what the refund was originally for.

So, if the original charge that was refunded at the facility was for "groceries", then the deposit should be against "gorceries" also, that way a category report for "groceries" will show the correct amount spent on "groceries" (the original amount - the refund).

MizzTeri

So how would that accurately report the facility charges?

MizzTeri

Chris_QPW and splasher, thank you both for your interest in helping me resolve this problem!!

splasher

MizzTeri said:

So how would that accurately report the facility charges?

It doesn't.  It only keeps the Checking account correct and category totals, reports will have the categories reporting correctly.
What type of account (in Quicken) is the facility account?  Liability?

Chris_QPW

What does a payment to "facility" actually represent?
In other words is it like rent, or are you somehow getting "equity" in that facility as in buying the facility and paying off a loan?

MizzTeri

The facility is a nursing home account. They send a statement each month of costs that I then record in that account. When I pay the bill, I transfer money out of checking into facility. It's strictly an accounting of costs and payments that can be reported to the government if requested.

NotACPA

OK,

So your record Costs in the "facility" account, based upon the statement, ... which reduces it's balance (much like charges in a credit card account).

Then you transfer funds from checking to Facility, which reduces checking and raises Facility, I suspect that it's raised to $0

How/When does the actual Nursing Home get paid?  Is that "transfer" actually a check to the Home, that you record as a transfer?

Why not simply record the "facility" as an expense category?

Chris_QPW

Makes sense to me because if you used categories you would end up with a big split for the payment to split off the difference costs (not that I think it would really matter to the government, they would just want a total).  If you use an account you can track each expense by date (provided that is in the statement) and category.

So we start with something like this:

But then they give you a refund of the $700 (I know these are ridiculous amounts, just picking them out of the air).

The end result should have the $700 back in the checking account, and leave the Nursing Home account zero'ed, and record what happened.  There are few ways for this to happen here is my take on it.

The "Refund For Services" transaction above zero's out the debit by using the syntax for the category with [The account your in] (as in a balance adjustment).

The "strange part" that makes this hard to wrap one's mind on this is why the Nursing Home would refund your payment and also clear the debit for the services?

It seems like in "real life" either you would have had to over pay them and now that only thing needed is a transfer back to balance the two accounts.  Or you paid "early" and they don't want the payment yet, and as such there will be balance still in the Nursing Home account you still need to pay later.

Chris_QPW

Actually as I think of this even though a balance adjustment would be the quick way to record the "zeroing out" of the account.  This might not be correct because you will have say Food and Rent recorded in a report that is showing as you paying when in fact you didn't.  If that was the case you would need to reverse the amounts in the categories that they were in the Nursing Home account.

But again, the part that I can't understand is who/what paid for the services if you didn't?
That would be important on determining if the costs should be recorded in a way showing you paying them, or not.

MizzTeri

Oh, my, Chris, you have gone above and beyond on this!! Thank you, thank you!! I have finally determined that the Nursing Home was set up as a Cash account (not sure why) so I would record the bill from the Nursing Home as Spending and then Transfer a check from Checking to Nursing Home which would record in NH as Receipt. The bookkeeper at NH had been charging for extra services (such as oxygen) but it wasn't consistent. She said they were being billed and passing it on to us. Also, our resident was hospitalized for days that had already been charged and paid for at the NH. Then the NH was sold. In reconciling they determined that we had overpaid however all we got was a lump sum figure for 2 different months. The refunds, of course, went into Checking as a Deposit but the only way this makes sense it to record the refund as a Receipt in the NH. This isn't ideal but that's the best I can come up with. It just has to make sense if we ever get audited!

Chris_QPW

OK where that refund came from now makes sense.  Given that you can't really tie the refund back to exact amounts that you paid, I think I would go with the balance adjustment I showed above with a payee/memo that makes it clear that they were over charging you and you got a refund.

oldngrmpy1

One of the things I do that I find handy, is if I have two outgoing (-) transactions in a month and one Incoming transaction (+) I will create an indicator like "MF20210523" (the date) and put that in the memo of each transaction that are related. Then you can do a search using MF20210523 and you get a result showing all related transactions for that particular all inclusive transaction. The date I put in is the date of the first in the series.

Chris_QPW

The more I thought about this you probably have enough details in the refund that you can record it back to the proper category instead of just using a balance adjustment like this (note I switched to a cash account just to be consistent with what you are using):

The refund can be entered either as one per line or use a split transaction, the point is just to use a reversed amount into the same category that you were overcharged in.  This should then reduce the overall total of what you paid in a given category if you run a category report.

MizzTeri

Thanks, everyone, for your help!! Chris - no details on the refund (crazy, huh??) so I've done the balance adjustment and that appears to work!! Thanks!!