What is suggested way to handle money transfers between friends? (edit)

mikek753b

How properly record bank transfers between friends?

This isn't income or expense, so it has to be a transfer type.

But, I don't want to create new account for each friend.

When I try to create a transfer the Quicken requires a friend account, it can't be empty, while I specify my Checking account.

I'd like to see this in Bills to have appropriate reminders for paying back or getting back.

thanks

Boatnmaniac

Not sure what you mean by a bank transfer between friends not being an income or expense transaction. Unless their bank accounts and yours are co-owned between you and them and you set up and track those accounts in your Quicken file, then what you transfer between yourselves are income or expense transactions because cash is being moved into or out of your bank accounts. That's pretty much the definitions of income and expense.

If I am misunderstanding something about what you are trying to accomplish, perhaps you could explain more about why you think these transfers are not income or expenses.

Transfers (or check payments) to friends should not be recorded as transfers because they are not being done between your own accounts. They should be recorded as Payments with the payment transactions being Categorized. Or if they are being received, they should be recorded as Deposits with an appropriate Income category selected.

1. The Payee would be the name of the person the payment is being sent to or received from.
2. If they are being given as gifts, categorize them as Gifts. You can even create subcategories for each friend by typing in the category field: Gifts:name of friend. Or by creating a Tag for each friend by typing in the name of the friend in the Tag field of the transaction. Repeat this for each friend. They will then show up in reports as gifts you made to them.
3. If they are being received as gifts, create a custom category by typing in the Category field: Gifts Received. You can create subcategories or Tags just like in #2.
4. If they are payments for some service or product you bought from them or reimbursement for something: Categorize them as such. For instance, if you will be reimbursing them for a meal they previously paid for you, then use the Food & Dining:Restaurants category.
5. You can put more details of what these payments are for in the Memo field of the transaction.

Questions?

Chris_QPW

I beg to differ it is either income or an expense. Let's say, me and my friend go out to eat, and the friend picks up the bill with the agreement that I will send them the money. I owe them that amount, and in reality, the expense is "Dining". This isn't really any difference than me putting the restaurant bill on my credit card. At some point I'm going to have pay that back. In the same way if I return an item somehow that money will be returned to me. It isn't "income" in the sense of a paycheck, but neither is income from say a dividend, it is money that flows into your account.

How you want to record this is really up to you, but it isn't a transfer unless there are two Quicken accounts involved.

I can think of a couple ways to record this.

The first is the most accurate. Just like my above credit card example. You in fact, do create a Quicken account for each friend. In it you record the money you own them, and the money that they owe you. At this point you would categorize the "reason" you owe that money (Dining) just like you would in a credit card account. And just like a return/credit in your credit card account you would record that as money coming into the that category. Example. You and your friend go out to eat, and you pay for the bill with your credit card, and in Quicken that transaction is categorized as $50 to Dining. Later you get $25 from your friend for their part of it, in their account you put in a positive $25 categorized as Dining. When combined this shows that you spent $25 on Dining.

The next way is just record this into your account with maybe a memo of who gave it to you with a category of what it was for.

So, for instance, if you get a payment from your friend that ends up being downloaded as a deposit in your checking account. That "income/in flow of money" is in fact a payment for say Dining and should be categorized that way. It will offset the amount you paid for on your credit card for that same meal for both of you. The same goes for a withdraw from the account to pay off your friend for them picking up the dining bill.

The first approach gives the added benefit of knowing how much your friend owes you or the other way around, but both hand the money and categorization correctly.

mikek753b

thank you all for the reply.

Unfortunately, above aren't my use cases.

Looks like I didn't provide all info, sorry about that, my bad.

My Use Cases:

1. I got money transfer to my Checking account from a friend for several thousands, that to cover my own bills and transfers to another accounts or to pay for my Credit Card balance. This is kind of no interest short term loan, that I pay back upon getting my paycheck. it's just for short term emergency below expected balance of my own funds. This transfer in isn't any income for me. It comes from a friend back account that I have no access to and I should not have.
2. I transfer to another friend some amount , which is also isn't an expense for me, that I'll get back as is in a week or a month

For now I've used "Cash Withdrawal" Category for above, but it doesn't look good for me, so I've looked for a better way.

No, I don't want to create new Account per a friend for those from time to time transactions. I'd like to keep number of accounts in my Quicken as less as possible, as I have already too many, above 30, for many reasons.

yes, when I return or get any money for a lunch or a like then I set "Dining Out" Category and just put to the Memo what's for. This Use Case works for me as you recommended above.

While I'm looking for no interest short term friendly loans. That I don't want to setup as real Loans due to it will require extra accounts.

thanks

volvogirl

Well you do need to setup at least 1 new Account as a Accounts Payable. Or maybe just use a new category for Owed to friends or Emergency Loan (as a category). You do need an account or category to run it all though.

Chris_QPW

If you totally don't want to track why you got the money or why you are withdrawing it you can use this syntax to get Quicken to ignore the amount, it basically the balance adjustment syntax. If the account name is "This Account" then set the category to [This Account].

The main problem with this is really doesn't give you any way to track what you owe or what the other party owes you.

Ps56k2

setup or rename a manual account - like cash wallet - that you transfer in/out for these special loans/paybacks - and then since the [Category] will be used for your local transfers in/out of checking - you could then use Tags for each person transaction … or just use Tags on the actual deposit/withdrawal transactions-

mikek753b

thanks again for your replies.

Should I create new and only 1 account to track money transfers in and out for friends? As I'd like to have for those transactions the Transfer type.

But, to exclude this new "friends" account from balances and projections, to have my true balances and total.

Should I keep the Category for this transfers as empty? And use Memo filed to help me know the meaning.

Or to create new Category "Friends" and appropriate sub Category as a friend name?

any other better way?

thanks

Chris_QPW

Here is my comments/suggestions:

Should I create new and only 1 account to track money transfers in and out for friends? As I'd like to have for those transactions the Transfer type.

The advantage of have an account per person is that you can just look at the account(s) and see what is owed/owed to you. The disadvantage is just the fact that if you use more accounts.

Should I keep the Category for this transfers as empty? And use Memo filed to help me know the meaning.

When using an account/transfers the "Category" becomes [Other Account] and as such can't be used for any other categorization. If you use an account per friend, then it is the account itself that gives that "category". If you use one account you could put something in the memo, but the better way would be as @Ps56k2 suggested and put a tag on that transaction, where the tag is the name of the friend. That way in a report you can filter by these tags.

Or to create new Category "Friends" and appropriate sub Category as a friend name?

As stated above using a category and a transfer don't mix. You need to either use the account or the tag to "categorize" it.

But as I think of your use cases I see one major flaw, they will not represent the real world and you will not be able to reconcile.

What is happening in your use case 1 is that you got $XXX.XX into your checking account, and it is going to stay there with the exception of you paying your bills. If any amount of it is transferred to another account your checking account isn't going to reconcile, and it will throw of the projected balances. As such, a separate account isn't appropriate or if used will extremely complicate the process.

The more I think about this, the least complicated way to do this is with a split transaction.

First deposit (to checking account):

Pay a bill credit card with this money:

This will keep the checking account balance correct and update the "Friend's Loan" category. Note you will need to normally filter out that category for anything other than tracking how much you owe your friend.

I was thinking that savings goals might be a way to do this too since they work with virtual accounts and the main funding account can keep track of both with the money shown in it and with it not there, but my first look at it, it looked complicated.

For use case 2 I think it is even simpler.

When they pay you back:

NotACPA

If these "transfers between Friends" are expected to be repaid, I'd use an "Accounts Payable" type account.

If there are such transfers involving more than 2 people, either multiple such accounts, or Tags, could be used.

Chris_QPW

I'd use an "Accounts Payable" type account.

That kind of account only exists if you have Home and Business.

Out curiosity doesn't it "play tricks" so that you can have the money in that account and still reconcile the fact that the money is still in the checking account?

Ps56k2

@mikek753b - it seems there are lots of moving parts in your logistics vs Quicken -

Several ideas have been tossed out - you might try playing with a couple of different methods,
and let us all know what seems to work for you …

mikek753b

thank you all for the reply.

Somehow my replies are delayed by quicken.com by several hours … only appears after several hours

Now I think to just to create new Category "Friends" and appropriate sub Category as a friend name, and no any new accounts

And to make sure that all those new sub categories, but I can't find a way to not mark as Income or as Expense. So, this isn't a go for me.

For a while I went with multi TAGs:

1. without extra account
2. Category as Deposit or Withdrawal and set TAG as Friend name
3. I use multi TAG when it's needed, as example TAG for a Friend and TAG for specific shared activity (group trip with shared spendings for food and other items)

No, it doesn't cover all my use cases and wishes yet

I can have my report based on any TAG or multi TAGs

I can insert Manual Bill to plan for those income or outgoing transfers.

thanks

Ps56k2

@mikek753b are you posting directly here in the forum text box - or some other method

Chris_QPW

Somehow my replies are delayed by quicken.com by several hours … only appears after several hours

That is the spam control system on this forum. For new users it randomly pushes their comments to be reviewed by the moderators. Once the moderator approves the comment it then appears.

mikek753b

https://community.quicken.com/discussion/comment/20391206#Comment_20391206

yes, directly by Brave browser

Ps56k2

@Chris_QPW … but they are not a “new user”

Chris_QPW

https://community.quicken.com/discussion/comment/20391232#Comment_20391232

In this case "New User" is defined by the number of points they have, and I don't know what the threshold is for this.

I will also state that when it happens the forum will post a message in the lower left of the window stating that it is doing that, but it only stays up for a few seconds, and as such is easy to miss, let alone read.

mikek753b

https://community.quicken.com/discussion/comment/20391296#Comment_20391296

this is off-topic to my original question

any generic new reply I submitted went in some pending state for several hours, the draft was saved Ok, but when I press Post Comment nothing happened, was look like my reply just disappeared

as I got several help replies I can't quote all, so I just generically replied

However, if I reply with the Quote, I see my reply to the topic right away … so go figure

mikek753b

test for generic reply - at 12:54 PM PST

Ps56k2

did you see your 12:54 posting immediately?

mikek753b

https://community.quicken.com/discussion/comment/20391369#Comment_20391369

yes, that time it went through right away

mikek753b

test for generic reply - at 2:38 PM PST

Chris_QPW

Post a couple of comments right after each other. That usually triggers the spam response.