Splitting transactions to represent reimbursement

Question

Hi there,

I need some assistance. For all of my utilities, including mortgage payment, I pay from my account and then my partner reimburses me half of all utilities, mortgage, etc. Is there a way to be able to split the transaction so I can have an accurate picture of my out-of-pocket expenses while accounting for the fact that half of all those transactions is reimbursed to me? I hope this makes sense.

Or maybe I should split the transaction in half and have one of them ignored or excluded? Thanks in advance!

sidneysb04 · Answer

Thank you so, so much for taking the time to write this out! I appreciate it and it is exactly what I was looking for.

jacobs · Answer

Ideally, you want to set up Quicken to mirror what happens in the real world. In this case, it sounds like you want Quicken to account for just your own income and expenses, and not your partner's. You need to record the full payment you're making from your account, because that's what happened in your real bank account, and yes, you want a split on that transaction so only half of the amount is an expense.

There are a few ways to do this, and some of it depends how much you want to keep track of. The simple way is to make the other split a Transfer — not to/from another account, just Category=Transfer. That's a special category in Quicken which is neither income nor expense, so it basically makes money appear or disappear. It's not the most accurate way of accounting, but it gets the job done with little effort on your part.

The way I'd recommend is just a little more work. I'd create an asset account; call it "Exchange" or "Expense Sharing" or whatever seems appropriate to you. When you pay a utility bill, make two splits, with half the amount using Category=Utilities and the other half in a split with a transfer to the Exchange account. (You can make the Transfer column visible an select the account there, or you can enter the transfer in the Category field by using the syntax "Transfer:[Exchange]". So this transfers the half of the bill to your asset account, because it's money which is owed to you. When your partner pays you that amount, enter the deposit in your checking account (or cash account, if paid in cash), as a transfer to the same Exchange account. The transfers aren't income or expenses, so your expense reports will be accurate. And the bonus of doing it this way is that the Exchange account keeps track of what money you're owed; it should zero out when your partner repays their share of the expense you have paid. You can even reconcile the account in Quicken periodically, so you have a record that as of a certain date, you had verified that the balance due was of zero or otherwise was accurate.

I used this same "Exchange" asset account approach to track my reimbursable expenses for work: the money spent was a transfer to Exchange, since it wasn't an actual expense for me, and it was offset when I received a reimbursement. It gave me an easy way to make sure I received all the reimbursements.

volvogirl · Answer

How are you categorizing the reimbursements?  They should go to the same categories that you paid.  Or you can set up a new Accounts Receivable Account and split half your payments to it.  Then enter the reimbursement to the A/R account to clear it.