Cash spent on a friend and the amount is later reimbursed by that friend. How to account?


I have a scenario where i have spent some cash lets say Rs.1200/- to buy some products on my friends request on his behalf. After 15 days, that friend of mine pays me back the amount which was due from him via online transfer to my bank account.

How do you take this entry in your software as if i take the purchases made by me in "Expenses" and later when i receive the payment from my friend, that amount is treated as an "Income" but actually that amount is not an Income.

Also i would appreciate if you could let me know what is the usage of Loans, Payee, Projects & using Splits with some examples. I didn't find your Help section that useful.

Hope you have understood my query. Awaiting for the response soon.

Thanks & Regards,

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Comments (2)


For this scenario, I created a group called "Assets" and an account called "Debtors". When I buy or lend money for others, I register it as a TRANSFER (because it is not an expense for me) from where I am using the money (cash, bank, etc...) to that "Debtor" account. Then, when my friend pays back, I enter a new TRANSFER from Debtor to the account where I receive the money.


I have been keeping track of Petty Cash in almost the same way. I have created accounts for each person that gets cash. When they borrow the cash, I transfer the borrowed amount to the name of the borrower. When they return the money, I transfer the money back to my main cash account. It is very useful for showing how much money is owed.