How to handle expense checks that include per-diem

[Andrew Sackville-West]

On Wed, Nov 07, 2007 at 07:17:11AM -0800, Bill Michal wrote:
> Sorry about the direct reply.  I missed changing it.

:) THat's okay, I sent the reply from the wrong address and it had to
be moderated... we all do it.

> 
> Thanks for the great explanation, it should become a How-To in the
> documentation!  ;)  

go for it. 

> 
> I was close to getting it, but showing the transaction flow pointed out how
> to handle the reimbursement check itself.
> 
> I think I'll expand this a little and create the accounts Asset:Reimb:Hotel,
> Asset:Reimb:Airfare, Asset:Reimb:Auto Rental, ...., Asset:Reimb:Misc and
> Asset:Reimb:PerDiem, because I'm nuts.  Actually I would like to see how
> much per diem is coming in.  I'll record the CC liabilities to the correct
> Asset:Reimb: account and split the reimbursement check to come from the
> right accounts as it goes to checking.  Using your examples, Asset:Reimb:Per
> Diem would look like

I see what you're doing and I guess it makes sense. The per-diem is
essentially extra money that you get to keep, right? In that case, it
is income. I don't know whether it's taxable or not, and I leave that
to you, but it is income, provided you get to keep that money. So you
can do like you've done:

...
> 
> Then a few days later, the company reimburses you with a check, which
> you deposit in you're checking account which now looks like this:
> 
> Date    Description   Account            Deposit  Withdrawal  Balance
> 1/20/07 Pay CC        Liability:CC       10.00                -10.00
> 1/25/07 Reimburse!    Asset:reim:Food    10.00                  0.00
>                       Asset:reim:PerDiem  5.00                  5.00
> 
> Which makes the Asset:reim:Food account register look like this:
> 
> Date    Description   Account            Increase Decrease    Balance
> 1/1/07  Dinner        Liability:CC       10.00                 10.00
> 1/25/07 Reimburse!    Asset:reim:Food             10.00         0.00
> 
> And makes the Asset:reim:PerDiem account register look like this:
> 
> Date    Description   Account            Increase Decrease    Balance
> 1/25/07 Reimburse!    Asset:reim:PerDiem           5.00        -5.00
> 

or you could do this:

> 
> Then a few days later, the company reimburses you with a check, which
> you deposit in you're checking account which now looks like this:
> 
> Date    Description   Account            Deposit  Withdrawal  Balance
> 1/20/07 Pay CC        Liability:CC       10.00                -10.00
> 1/25/07 Reimburse!    Asset:reim:Food    10.00                  0.00
>                       Income:per-diem    5.00                  5.00

note that its now tagged as some kind of income, so this looks the
same:

> 
> Which makes the Asset:reim:Food account register look like this:
> 
> Date    Description   Account            Increase Decrease    Balance
> 1/1/07  Dinner        Liability:CC       10.00                 10.00
> 1/25/07 Reimburse!    Asset:reim:Food             10.00         0.00
> 

and the asset:reim:perdiem account goes away.


> The $5 has already been moved to checking, so it is available.  The per diem
> amount is less than or equal to the allowed per diem limit, there are no
> taxes to be worried about.  So my last question is do I just let the
> negative balance build in Asset:reim:PerDiem, knowing that is how much I've
> "gained" from per diem?  It does seem weird that its negative.

its negative because its not really an asset. 

you can't let that money accumulate forever. Otherwise yuo've got this
continually growing negative asset. That's just not right. You're
getting the money and keeping it, so its income. 

Its important to remember that all money has a starting place and an
ending place. It never accumulates endlessly like that. The only
things that accumulate endlessly are income and expenses. Those are
the starting and ending points for the flow of money. In the case of
reimbursements (not the extra per diem part, but direct
reimbursements), the money isn't yours, but someone else's and the
income and expenses aren't yours. That's why that money never touches
an income or expense account. But the money that is yours to keep or
spend must eventually touch an income or expense account.

A
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