New user question....can I credit a refund to an expense category?

I've already had a live chat with a coach but am still pretty confused.
So I have several expense categories that also have refunds/reimbursements. These are things like dry cleaning and flex spending. I originally entered all of my transactions such that if I had a dry cleaning expense of -$50 and was reimbursed that reimbursement was entered using that same expense category but as a +$50. When I looked thru the reports or sorted transactions by that category it appears to accurately reflect my actual NET out of pocket expense.

What are the ramifications of using the app this way? My coach suggested that I needed to create an income category for each of those expense categories and to use THOSE to capture the reimbursements. So I dutifully went thru all of my transactions and did so.

Where I'm confused is that I see ZERO difference in how anything is presented in Simplifi. So why go thru this entire exercise????? I've only been using the app for about a week so I'm sure I'm not seeing something.....or did I get bad advice?

Best Answer

  • Coach Natalie
    Coach Natalie Administrator, Moderator admin
    Answer ✓
    Hello @StarbucksBob,

    That's a great question!

    Although creating an Income Category to offset the expense is one way to do it, it's not the method that I'd recommend. Personally, I just use the same Expense Category for the reimbursement, and everything offsets appropriately. I also use this method in Quicken and it's always worked great for me in both programs.

    I apologize for the bad advice and I hope that this gives you a better idea of how to handle these types of scenarios moving forward. :smile:

    -Coach Natalie


  • Flopbot
    Flopbot Superuser ✭✭✭✭✭
    edited March 25
    Great question @StarbucksBob!  Great answer coach.  I learned something too here!

    Two follow up questions for @Coach Natalie would be:
    • Can you explain what the ramification of making a purchase for $101 to "Category XYZ"  in March and then refunding $101 to "Category XYZ" in a different month - April - would be?
    • Is there a difference in doing refunds using Simplifi's Refund tool vs. just selecting the category manually?  Is one inherently better?  Would it change reporting?

    Quicken Desktop user since 2014.
    Brand new to Simplifi in 2021.
  • Coach Natalie
    Coach Natalie Administrator, Moderator admin
    edited March 25
    Hello @Flopbot,

    Also great questions!

    The only ramification of making the purchase in a different month than the reimbursement that I can think of would be that the offset wouldn't occur within the same month in the Spending Plan. Ultimately, you'd end up with the same net amount in Reports, etc., and technically, you'd get some extra spending money in the following month. :wink:

    As for using the Refund Tracker, this is honestly just a tracking tool only. Linking a transaction to a Refund does not impact how it appears in Reports or anything like that, as those are based on the Category of the transaction, etc. 

    I hope this helps, but please let me know if you have any additional questions! 

    -Coach Natalie
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