How do you manage personal "receivables"?

Doug Laidlaw laidlaws at hotkey.net.au
Sat Jan 31 19:48:52 EST 2009


I would do it the same way.

Is the question really: "I don't want to set up a separate Debtor account for 
each loan, because they are short-term."?  They probably won't stay on the 
books until statement time, or if they do, you don't want to send reminders 
to friends.  So create a debtor called "Miscellaneous loans" or similar to 
hold them all. The difficulty then is that it is hard to dissect, and see who 
has paid and who hasn't.  I had this problem accounting for bills sent to 
Legal Aid.  In retrospect, I should have kept them separate, but then the 
person I did the work for, would show as the default debtor.  All that is now 
history.

The loans don't sound to me like business transactions, but private ones, 
except that they do generate some income for the business.  This is the  kind 
of question I would put to the accountant who does your tax.

Doug.
On Sunday 01 February 2009 12:54:37 am Fred Frigerio wrote:
> If there is any interest, then you have an income. Otherwise you are moving
> a liquid asset (money) into a less liquid asset (a loan).
>
> On Sat, Jan 31, 2009 at 6:41 AM, Geert Janssens
>
> <janssens-geert at telenet.be>wrote:
> > On Saturday 31 January 2009, Rafferty Uy wrote:
> > > Hi,
> > >
> > > Just wondering how you guys manage temporary (and extremely short term)
> > > loans by friends?
> > >
> > > What I did was to create an Accounts Receivable and Account Payables
> > > account.
> > >
> > > If my friend borrows money from me, I'll count it as an expense and
> > > place the entry in accounts receivable. Then when they pay me back, I
> > > split the AR transaction and enter as income the amount payed back. But
> > > I'm not
> >
> > sure
> >
> > > if this is the correct way... because the date that the money is payed
> >
> > back
> >
> > > is no longer accurate (because I'm editing an old transaction).
> > > However,
> >
> > if
> >
> > > I do it separately, it can be confusing which receivable is payed and
> >
> > which
> >
> > > receivable isn't.
> > >
> > > What's the recommended way to do this?
> >
> > Borrowing money has nothing to do with income or expense.
> > I would use this transactions:
> >
> > * 100.00 borrowed to a friend on 10/01/2009:
> > Date            Description     Account                         Amount
> > 10/01/2009      Friend X        Assets:Cash                     -100.00
> > 10/01/2009      Friend X        Accounts Receivable     100.00
> >
> > * Friend pays me back at 21/01/2009:
> > Date            Description     Account                         Amount
> > 21/01/2009      Friend X        Assets:Cash                     100.00
> > 21/01/2009      Friend X        Accounts Receivable     -100.00
> >
> > If you wish to know how much Friend X still owes you on date Y, you can
> > create
> > a transaction report on the Accounts Receivable account, and group/sort
> > on description.
> >
> > Alternatively, if you have friends you regularly borrow money to, and you
> > want
> > to track these friends separately, you can create subaccounts of
> > A/Receivable
> > for each friend and use these subaccounts in the above transactions.
> >
> > Hope that helps.
> >
> > > Thanks!
> > >
> > >
> > > Rafferty D. Uy
> > > Software Engineer @ ease solutions Pte. Ltd.
> > > MBA Student @ National University of Singapore
> > >
> > > "Being a CEO is like answering a call to bring the organization to a
> >
> > better
> >
> > > place than where you found it."
> > > ~ Ed Ludwig (CEO of Becton, Dickinson)
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