Splits in Spending Report

Adience

I am trying to learn to use splits for the first time.

My checking account (CHACCT) pay $1000 mortgage payment a month. $700 towards the principal, $300 is the interest.

In CHACCT, the $1000 is recorded in the Payment column with a Category: Split. Inside the split

• $700 has a category of TRANSFER to the mortgage loan account
• $300 has a category of "interest expense"

Now two strange things I notice:

#1: in the Spending tab on top, I just see the $1000 as a "Split" category, there is no breakdown. this surprised me because it actually counts the $700 transfer as an expense (Which is what I want from a cash flow perspective, but didn't think it would've been counted here because none of my other Transfers is considered Spending).

#2: when I run expense reports, under Housing, the $700 principal Transfer is no longer being counted. All I see is the interest payment, which isn't my total monthly cash outflow.

Is there anyway so I can continue to transfer money from checking account to mortgage account to reduce the mortgage amount while the principal payment will still be counted as my monthly spend from a budget perspective. Then secondarily, it would be good to have mortgage interest as a separately data point in spending reports instead of being embedded in a split.

thanks

Jim_Harman

Instead of using the Transfer Category, the split for the principal payment should have the name of the mortgage account in [square brackets.] That will record it as a transfer rather than an expense.

You can set up and use a different Category for the mortgage interest. To appear in the Tax reports and Tax Planner, it should have a Tax line item of Schedule A: Home mortgage interest (1098)

Adience

Hi @Jim_Harman , yes by me typing capitalized Transfer, I meant to say it’s using the [mortgage account] way where it’s considered a transfer rather than an expense.

But I would like both the principal and the interest to show up separately part of the monthly expenses. Is that possible?

Right now, there is only 1 line that shows up in the Spending report, which is the total of the principal plus interest.

Before I learnt about the split feature a few years ago, I actually setup 2 monthly bills, one is a transfer of the principal and one is the interest expense. That way, the principal does not show up in spending reports, while the interest does. Again, I would like both to show up in monthly spending reports. Is that possible?

Adience

alternatively, can I selectively include account transfer transactions into the spending reports?

Jim_Harman

Strictly speaking, transfers between accounts are not income or expenses, but if you want to treat transfers from an account as income or expenses for reporting purposes, you can customize the report so that it includes the "spending" accounts but does not include the other account(s). Then if the spending account receives a transfer, the sending account will be listed in the Income section of the report as FROM <account-name>.

If you are using the Banking > Cash flow report for a transfer you are treating as income, you should include the receiving account but not the sending account, and on the Advanced tab next to Transfers, select "Exclude internal". The terminology is confusing, but "Exclude Internal" tells the report to ignore transfers between accounts that are selected for the report (payments from your checking account to a credit card account for example) but to include transfers between the selected accounts and other accounts.

Other reports have different default settings, but they work the same way: Include the "spending" accounts but not the other account(s), and on the Advanced tab set Transfers to "Exclude internal". If the report has an Organization setting on the Advanced tab, set it to “Cash Flow Basis”.

If you want to exclude specific transfer accounts from the report, you can scroll to the bottom of the Categories tab, where you will see all of your accounts listed. Un-check those you want to exclude.

You can control which transfers are included in your Budget reports by clicking on Manage Budget Categories on the Budget page and making selections in the Transfers In and Transfers Out sections.

Adience

let me follow your suggestions @Jim_Harman

1. If you are using the Banking > Cash flow report for a transfer you are treating as income, you should include the receiving account but not the sending account. 

Done. Checking RBC is selected, and Portland Mortgage isn't

2. on the Advanced tab next to Transfers, select "Exclude internal". - Done

But as shown here, inside the Cash Flow report, under Mortgage Payment, it's still showing Mortgage Interest, no Mortgage Principal

you can see from here that I did setup both Principal and Interest as sub-categories of Mortgage Payment

any thoughts?

Adience

also, I actually use the Spending tab on top more than actual reports to get a quick glance of my spending (maybe I should change that habit, but I just never thought of using reports).

here is what I meant before, in this view, it only shows the total mortgage payment as an expense, not broken down into principal and interest.

I don't see anywhere on the screen I customize this.

is the solution here just to always use Reports?

Jim_Harman

The spending tab has limited customization; you must use the actual Cash Flow report.

Assuming the report is set up as you described above and you have recorded the principal payments as transfers in square brackets like [Portland Mortgage] rather than assigning them to a Category like Mortgage Payment:Mortgage Principal, if you scroll to the bottom of the Banking > Cash Flow report, you should see a TO Portland Mortgage line which has the principal payments.