Refund behavior options for your categories and transactions

If you have a refund or deduction, you can choose how PocketSmith deals with this type of transaction. Learn how to set refund behavior on your categories so that your transactions are displayed accurately!

In this user guide

Refund behavior overview

When a transaction is imported or created in PocketSmith, it is either a credit or debit transaction. Once a transaction is assigned to a category, by default, PocketSmith will treat a credit transaction as income, and a debit transaction as an expense.

This works well in most cases, however, what happens with credit transactions that aren't technically income, for example, when you receive a refund for returning a purchased item or your friend reimburses you for buying dinner?

Although the default refund behavior on each of your categories in PocketSmith is to treat credit transactions as income and debit transactions as expenses, PocketSmith lets you choose and change the specific types of refund behavior for each of your categories. This refund behavior will then applied to transactions assigned to that category.

There are three different refund behavior options:

1
Default, debit and credit treated separately
2
Always expense, all credits are refunds
3
Always income, all debits are deductions
You can learn more about each of these options below. 

Refund behavior options

It's important to consider what refund behavior is set to be applied to each of your categories, as this will affect how the transactions assigned to a particular category are calculated and displayed in different areas of PocketSmith, such as within a budget, on the Cashflows page, the Income & Expense statement, your Dashboard Earning and Spending graph and the Income and Expense pie on the transactions page.

Note

As soon as you create an expense budget for one of your categories, PocketSmith will adjust the refund behavior for that category for you, to Always expense, all credits are refunds.

Let's take a closer look at each of the refund behavior options and see what happens when they are applied:

Default, debit and credit treated separately

This is the default option that PocketSmith applies to your categories. It means that income and expense transactions that are assigned to your categories are treated separately - so they will each be displayed as income or expense respectively.

Always expense, all credits are refunds

When this option is selected, the category and its transactions will only show in expense sections in PocketSmith. Any credit transactions assigned to this category will be treated as a refund and subtracted from the expense total. 

Always income, all debits are deductions

When choosing this option, the category and its transactions will only show in income sections of PocketSmith. Any debit transactions that are assigned to this category will be subtracted from the income total.

Changing the refund behavior on your categories

1
Head to  Settings >  Categories 
2

Navigate to the category you'd like to edit and click on the three-dot menu 

3
Select  Edit 
4
Under 'Refund behavior', choose from one of the three options provided and click  Save


FAQs

Does refund behavior affect how transfer categories are displayed?

It's best to set the refund behavior for transfer categories to Default, debit and credit treated separately. This is because transfer categories will include both income and expense transactions.

Why is one of my expense categories showing in the income section?

If you assign a refund transaction is to a category with the default refund behavior set, then the transaction will be treated as income. The category and transaction will then be displayed in any income areas in PocketSmith. You'll just need to  change the refund behavior to Always expense, all credits are refunds

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