Manual Accrual or Liability Accounts

whoisbwood

Does anyone know how to account for annual expenses that you want to recognize as an expense each month, but also have a growing liability or negative savings account associated with it?

Example:

We have to pay a large expense at the end of the year for property taxes. We save money each month for it and want it to hit our budget each month as the property tax category. But we also need a liability or debt account associated with it, because even though the money is in savings, we still owe the taxes.

It would be nice if 2 manual accounts could be linked to each other as balancing accounts.

I'm hoping that I just missed the instructions on how to handle these types of scenarios, so if anyone can point me in the right direction, let me know!

Workaround

The workaround that I'm currently doing is a bit wonky a cumbersome, but I'll explain just in case it's helpful.

1. I created manual Savings accounts for each of the debts and added a "Z" to the beginning of the name, such as "Z College Accrual" and "Z Property Taxes".
2. Each month I add a manual transaction to each account and use the proper categories such as Tuition, Property Taxes, HOA fees, etc. This creates a negative balance in each account to offset my overall savings balance.
3. When the bill is actually paid, I treat it like a transfer and I change the category to the appropriate "Z" account. So when I pay property taxes at the end of the year, I change the category to "Z Property Taxes" and it creates a positive entry in the Z Property Tax account to offset the negative balance.

This method allows me to recognize the expense each month and also account for the growing debt.

Coach Natalie

@whoisbwood, thanks for posting your inquiry to the Community!

Have you looked at using Savings Goals, by chance? You can set up an individual Goal for each item and then contribute the monthly amount to it each month. If the Goal is included in the Spending Plan, those contributions will count as expenses.

Here is our support article for using Savings Goals: https://help.simplifimoney.com/en/articles/3676756-using-quicken-simplifi-s-savings-goals

We also have this #TipTuesday that you may find helpful:

https://community.simplifimoney.com/discussion/3446/tiptuesday-using-savings-goals-to-break-down-annual-bi-annual-expenses-in-the-spending-plan

Let us know if this works for you!

-Coach Natalie

DannyB

Hi @whoisbwood

The above linked #TipTuesday was my way of tracking up until Planned Spending rollover was implemented a few months ago. I have now set up a Planned Spending category for my annual/semi-annual expenses and let the funds accumulate in those categories in Simplifi. HOWEVER, that money still needs to accumulate in my actual bank accounts somewhere.

Here is my process for setting this up with changes and challenges along the way. Still a work in progress.

In the real world I have an automatic transfer into a savings account for the monthly amount needed to cover these bills when they come due and I pay these bills directly out of that savings account. In QS, when the bill comes due and is paid, it will be assigned to the Planned Spending category in that month and theoretically will be covered by the accumulated rollover funds.

The Savings Goal workaround keeps your monthly contribution to the annual expense IN your monthly Spending Plan but you have to exclude the actual bill payment when it occurs. The Planned Spending category with rollover will keep both the monthly "payment" and the actual bill payment in the Spending Plan.

Your liability or debit account associated with an annual expense is interesting.