Hello everyone,

I've been using KMyMoney for a couple of months now to keep track of the household finances. I'm not a complete newbie anymore but far from being an expert. I have a practical usage question for the KMyMoney community.

I often find myself in the situation where I advance someone money and it is fully expect to be paid back.
I could for example pay for a colleague's lunch by credit card, because they forgot to bring their wallet, but as soon as we get back to the office I get the money from them in cash.
Or I could be buying a gift, say for my parents, but my siblings agreed to split the cost with me (and not necessarily evenly, since they may not have the same resources available).
I've been wondering how to handle this kind of situation in KMyMoney in a way that allows me to see whether I'm still owed money, and if so, by whom and for what.

At the moment I only have simple categories named "Other/advanced" and "Other/repayment" on both the incoming and outgoing section. This only allows me to match up the totals, however and when they don't match up (as indeed tends to happen) I cannot find out where the money is missing.

Does enyone else encounter this problem and if so, how do you handle it?

I have considered creating separate subcategories for each instance, but they trouble is I would have to create two of them, symmetrically, one incoming and one outgoing. Also, I think I would have to create a report of it's own for each of those pairs of subategories, only to see if they come out to zero, as indeed they should.
This seems extremely inelegant.

Should I create a whole loan account for each instance, instead?
The advantage would be that I can easily see whether the account is balanced and once it is, I can close it. But how would I concretely handle this, e.g. in the gift case? Say I pay for it by credit card, so I put the whole transaction into KMyMoney with the total amount paid (how much the gift cost). Can I have a split entry with part of the total sum going to a category (i.e. "gifts") and part to an account (i.e. "birthday-gift-mom-2011"). Then that new account would be in the plus, after the transaction. Well, it is money someone else owes me, so I guess it is an asset. But then say I get the money back from my brother, e.g. via bank transfer, should I enter it as a transfer from the loan account?
OK maybe I answered my own questions there, but what if we decide to bring the repayment up or down to a round figure, then the account would never be balanced and so I couldn't ever close it...
Socially, it might be defensible to insist on the exact amount in a bank transfer, but when I pay my colleague's lunch and he gives me the money back in cash it will almost certainly not be the exact amount and I couldn't possibly insist in that case.
And wouldn't all these new accounts springing up really mess with my reports (the assets and liabilities ones)? Can I/ should I exclude them? Wouldn't I have to do that explicitely every time I want to see an "assets & liabilities" report, so I have to fiddle with the report's settings every time? (Or if I've already excluded the parent account, will new accounts created within it be automatically excluded, too?)

This solution with a separate loan account for each instance of me advancing someone money, seems like it might work, but also like it's a little overkill. I mean it's a bit silly that I have to open a whole new loan account in my finance software, just because my colleague didn't bring his/her wallet to pay for lunch... We're talking small amounts here, makes it seem like more trouble than it's worth.

Is there an easier solution?

P.S. Sorry for the length of this post, but I wanted to explain my reasoning and show that I did actually think about for two seconds before posting.

I would definitely solve this using an asset (for money owed to you) and a liability account (for money you owe). But I would use only one account for all such small loans not one account/loan. There are ways to get the balance/payee in this setup.
As for the accounting of the imprecision of the transactions it all comes down to how much precision you need. I would keep my bank accounts precise but you can decide how accurate you want to be with your cash account. If you would like to keep it really accurate use two categories (income/expense accounts) to account for the gain/loss .

Thanks for the extremely quick reply and the helpful advice. Limiting the number of new accounts sounds like the smart move. I will try this and then report back here with my experiences.

I would have thought that, if you associate each loan/repayment to a Payee (under Advanced and Repayment categories) you simply have to look at the list of transactions associated with a Payee. If there is an odd number of transactions, you are owed something! Whether you need to set up a separate account will depend on how many times this happens and the overall amounts involved.

That's true. However, let's say I buy a gift at example.com and pay by credit card. There will be only one payment transaction in my ledger and I only want there to be one, because I want to reconcile with my account statement later. The payee here will be example.com. I can make it a split transaction, but that only allows me to associate separate categories and notes with partial amounts, not separate payees. Hence, in this case, the problem persists...

In that case, you can enter the split transaction in your credit card account as you explained with one split referencing a category and another an asset account. After you have created the transaction, the payee will be the same for all splits. You can then switch to the asset account and change the payee there. Now you have a two different payees.

Yes, thanks, that's what I will do.

It still necessitates an extra asset account for money advanced (and perhaps a loan account for money borrowed), but only one such account for all instances and not a separate one for each. I can then sort all transaction in this special asset account by payee and that will tell me who still owes me money. (Same with the loan account for money I still owe).

I haven't had a chance to try this yet, because it hasn't come up recently, but when it does I will do things this way.
Thank you all for your help, it's much appreciated.