When you receive a refund or a reimbursement, you may not want this to appear as income in your PocketSmith reporting. To manage this, you can set the Category type to expense. This will mean the credit transaction is deducted from the expense category total, and won’t falsely inflate your income figures. Read on to learn how to do this!
Category type overview
When creating or editing a category, you can set a category type to determine how any income and expense transactions assigned to this category are reflected in your reporting and budgets.
By default, for unbudgeted categories, PocketSmith will treat credit transactions as income and debit transactions as expenses.
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?
This is where category types come in handy! By changing the category type, you can tell PocketSmith how you want income and expense transactions for a particular category to be treated in your reports and budgets.
The available options for category type are as follows:
Would you like income and expense to be treated separately in reporting?
- Yes, this category can include both income and expenses
- No, this is an expense category (any income is a refund)
- No, this is an income category (any expenses are deductions)
To learn more about category types, please see: Category types in PocketSmith
Ensuring refund or reimbursement transactions don’t appear as income in PocketSmith
The best way to handle reimbursement or refund transactions is by changing the Category type of the Category you're assigning the transactions to: No, this is an expense category (any income is a refund). As seen below:
This category type means the category will always appear in the Expense section of PocketSmith reports, and any credit transactions you assign to it will be subtracted from the expense total.
Categorising refund or reimbursement transactions
Assign both the original purchase transaction and the reimbursement/refund transaction to the same expense category. This way, any reimbursement from the refunded goods will be subtracted from the expense total in that Category ✨
To learn more about category types, please see: Category types in PocketSmith
Changing the category type
- Head to Categories (Manage > Categories)
- Navigate to the category you'd like to edit, hover over the end of the row, and click on the three-dot menu
- Select Edit
- Under 'Category type', choose from one of the three options provided and click Save
