Report income and expenses

Shahab 's Avatar

Shahab

11 Nov, 2017 09:05 PM

Im trying to display a regular investment transaction i make show on the income and expenses report, which currently is not.

The regular investment transaction is a "Split" & thus doesn't show on the report.

screen shots are attached.

Please advice how i show the transaction on the monthly report .

  1. 1 Posted by dwg on 11 Nov, 2017 09:29 PM

    dwg's Avatar

    I would be looking at the report parameters, even perhaps selecting "By Individual" to ensure that the right categories are being included.

  2. 2 Posted by Shahab Malek on 12 Nov, 2017 02:12 PM

    Shahab Malek's Avatar

    E.g. Under the parameters I have searched by each individual & ALl, but the
    transfer transaction out to my investment account is not available to
    choose from. Does splitting the transaction into two securities within the
    investment account prevent it being shown within the parameters?

  3. 3 Posted by dwg on 12 Nov, 2017 08:33 PM

    dwg's Avatar

    No Split transaction should make no different to the report parameters,

    But you just said a transfer transaction. Transfers between accounts are never considered to be Income or Expenditure, they are considered to be changing your Asset/Liability mix between accounts, it is only when you post a transaction to an account and the destination is a category that it is considered to be an Income or Expense Item.

    I know at time it can be desirable for amounts to appear in the I&E reports so I can suggest a method of doing this with an example.

    Suppose you are retired you have a retirement investment and you draw down this to fund your retirement, it might be considered a private pension, Your entry in your retirement investment you would transfer to a category you create - perhaps called something like Investment drawdown. You then make a deposit entry for the amount to your bank account categorizing it as say pension income.

    Your investment drawdown category is not normally included in reports but your pension come category is.

  4. 4 Posted by Shahab Malek on 14 Nov, 2017 10:20 PM

    Shahab Malek's Avatar

    Hi

    Thanks for your reply.
    Im not sure if i fully understand your instructions as after trying my
    balances dont equal up to what they should.

    I transfer a regular amount every month to an investment account (which
    works nicely currently, eg the bank register and investment transaction
    report summarise these transactions perfectly)

    So are you suggesting i create an additional expense category with the
    same name as the investment account and manually create a deposit of the
    transfer transaction?
    If i was to do this, then would it not show double the amount leaving my
    bank account?

    I would appreciate some more advice please here.

    Many thanks

  5. 5 Posted by dwg on 14 Nov, 2017 11:45 PM

    dwg's Avatar

    Never ever create a category with the same name as an account, at some point that will cause problems.

    What I am saying is that instead of doing it as a single transfer transaction enter it as 2 separate transactions, we are dealing with an application that follows the principles of double entry accounting so we must comply with those rules.

    I am retired and have what we call here an Allocated Pension. In other words my retirement savings are invested (in mutual type funds) and some amount is taken out every year, at times there is some taxes involved as well.

    So I have an Investment account with securities in it and I have my bank account.

    I set up two categories, one I have called Investment Drawdown (expense category) and the other called Allocated Pension (Income category).

    My workflow is basically as follows.

    1. Do a sell transaction in the investment account to realise the cash needed to pay the pension payment.
    2. Enter a transaction in the Investment account for the payment with the category being Investment Drawdown. This reduces the Investment as appropriate
    3. Enter a new deposit type transaction in the bank account for the pension payment with the category of Allocated pension - which is an Income Category. When I have taxes to pay I would enter it as a split type transaction the same as you would a paycheck with only the net amount going to the bank account and the taxation payment recorded appropriately.

    There are variations on the above workflow for different situations but the concept is consistent.

    The Investment Drawdown category I would only every report on if I wanted to see the amounts withdrawn from the investment. The allocated pension is my "Income" category

  6. 6 Posted by Shahab Malek on 15 Nov, 2017 08:58 PM

    Shahab Malek's Avatar

    Hi

    Thanks for your explanation, once again much appreciated, however im still
    stuck.

    You mentioned, "enter it as 2 separate transactions". Currently its a
    single transaction, eg £100. Thus on my monthly bank account it shows £100
    leaving into my investment account. Thus if i was to enter it as two
    transactions, my bank would show £200 leaving (although my I&E report would
    only show £100 as the investment transactions are not accounted).

    Thus my question specifically relates to how i could enter it as two
    transactions without it showing double entries on my bank account using the
    principles you mentioned previously.

    Thanks in advance.

  7. 7 Posted by dwg on 15 Nov, 2017 10:16 PM

    dwg's Avatar

    There is only !00 leaving the Investment account and 100 entering the bank account in the example the other !00 amounts are recorded in categories in Moneydance and record the other side of the transaction for the purpose of complying with the double entry account rules in use.

    what you end up with is

    1. 100 being taken out of the Investment account as part of this transaction it is recorded as an expense in the Investment Drawdown category.

    There is a completed transaction your investment has been reduced by 100 but there is no entry in the bank account yet

    1. Record a deposit in the bank account with a suitable category in mt cause it is "pension Payment"

    This is also a completed transaction and from a software point of view it is not liked to the first transaction

    So you now have the 100 in the bank account, you have 100 in appropriate categories (2 categories to be exact one Income and one Expense) to report on and your investment has reduced by 100.

  8. 8 Posted by Shahab Malek on 16 Nov, 2017 11:12 AM

    Shahab Malek's Avatar

    Hi

    Thanks for this ( I have stored this email for when I need to liquidate the
    investment)
    But
    I apologise for my lack of understanding, but how does it work when your
    working the other way round, e.g. Placing funds into the investment account
    account from your salaried earnings ( so the I&E reports it and current
    bank account balances).

    Thanks in advance again and I'm very grateful for your explanation thus
    far, just require one last piece of info.

  9. 9 Posted by dwg on 16 Nov, 2017 09:02 PM

    dwg's Avatar

    I'm not sure what you are trying to achieve here and why.

    With Salaried earnings you would you a split deposit to record the income and the splits into different accounts & categories. For example:

    1. the first line in the split is your gross salary

    2. The second line may be for the taxes taken out and you record this to a taxation category

    3. Say you have health insurance deducted this may be another split categorized appropriately.

    The net amount left over is shown as a deposit into the bank account

    If you have something like retirement savings taken out you would show this as another line in the transaction with the destination being a retirement account - which is usually an investment account

    The overall category of the gross amount is under salary, the retirement savings however does not appear on any I&E report since to do so would count it double - both under income and under some sort of retirement category. Also I&E reports do not record transfer between accounts as technically these are jut changing your asset mix.

    If you could elaborate more on what you are trying to achieve we may be able to suggest an approach that could work for you.

  10. 10 Posted by Shahab Malek on 16 Nov, 2017 09:26 PM

    Shahab Malek's Avatar

    Hi

    I find explaining via text rather difficult, thus i recorded a screen video
    & voice showing and describing what im trying to attain.
    Hope it helps in understanding my question a little better.

    Thanks

    Link:
    https://photos.app.goo.gl/otZiY96kUkX2VSgB3

  11. 11 Posted by dwg on 17 Nov, 2017 03:17 AM

    dwg's Avatar

    I believe I understand what you are trying to achieve, and I think it is achievable.

    There are a couple of rules in Moneydance that impact it.

    1. For every Credit there must be a corresponding and equal Debit, so the standard double entry accounting rule

    2. Income and Expense Reports derive their data from category information so Category information equates to I&E data, Account information relates to Assets & Liabilities. Hence transfers between accounts never appears in I&E reports as in most cases it is not possible to categorize the transfers.

    Moneydance can be extremely flexible so long as you meet the rules.

    I’ve shown one mechanism above to show drawdowns from Investments as an income item when received into a bank account.

    You have asked about recording an item so it appears on the I& E report when it is part of a salary payment, lets start with the basics, suppose your salary is 5000 and the tax payable is 1000.

    You set up a split transaction in your bank account (which s the destination of your net salary), it may look something like:

    Salary & Wages 5000
    Taxation:Salary 1000

    In your I&E report you will have an Income item for the salary of 5000 and an Expense item for the taxation of 1000, there is no item for the net amount of 4000, the 4000 is deposited to a bank account and that is an Asset hence not an I&E item.

    Let me make your case a little more generic suppose I wish to divert 500 from my salary to a retirement investment.

    If I just add an extra line to the above transaction for the 500 and direct it to the investment account It will not show on the I&E report since the destination is an asset, the numbers will all be correct in that the amount to the bank account is 3500 reflecting the change.

    This is where we need to adapt a little. Now personally I want my reports to still be accurate so at the end of the day I still want to see my correct Gross Salary in the I&E report.

    To achieve this goal I firstly need to rearrange the categories a little. I’m going to make use of the fact that moneydance in its reports adds subcategories together to reach overall category totals.

    So I would add a new Income category, in this example I’ll call it Employment Income.

    I would then set the existing Wages and Salaries category to be a child category of my new Employment Income category.

    I then setup an another income category to be another child of the Employment Income category and say call it Retirement Contributions (the names are not important whatever works for you).

    The result in any I&E report is that retirement contributions are shown as a separate item and these together with the Wages and Salary roll up to the Employment Income category which represents the gross income.
    To enter the transaction in the bank account we take the following sort of approach, suppose my Investment account is called Retirement Investments

    Employment Income:Salary & Wages 4500
    Employment Income:Retirement Contributions 500
    Taxation:Salary 1000
    Retirement Investments 500

    You can see I reduced the Wages and salary by 500 the exact amount going to the retirement account

    The result on the I&E report is an Employment Income Total of 5000 a Salary amount of 4500 and Retirement contribution of 500 along with the Taxation expense of 1000. The Retirement Investments and the net bank deposit never appear on the report.

    If you just wanted to take money from an account and place it in the retirement account you would use a method like I outlined earlier except in reverse. You could also do that here if you wanted the monies to appear in the bank account first.

    I think you probably need to set up a test data set and try the techniques out for yourself.

Reply to this discussion

Internal reply

Formatting help / Preview (switch to plain text) No formatting (switch to Markdown)

Attaching KB article:

»

Already uploaded files

  • Screen_Shot_2017-11-11_at_20.51.36.png 13.3 KB
  • Screen_Shot_2017-11-11_at_20.51.48.png 80.6 KB
  • Screen_Shot_2017-11-11_at_20.52.36.png 26.5 KB

Attached Files

You can attach files up to 10MB

If you don't have an account yet, we need to confirm you're human and not a machine trying to post spam.

Keyboard shortcuts

Generic

? Show this help
ESC Blurs the current field

Comment Form

r Focus the comment reply box
^ + ↩ Submit the comment

You can use Command ⌘ instead of Control ^ on Mac

Recent Discussions

17 Dec, 2017 03:37 PM
17 Dec, 2017 03:21 PM
17 Dec, 2017 03:05 PM
17 Dec, 2017 02:58 PM
17 Dec, 2017 02:55 PM