Handling returns: Inaccurate category reports

DavidH's Avatar

DavidH

21 Jan, 2019 12:27 AM

I'd like to hear suggestions on how best to handle returns, with respect to categories. Consider the following example:

1) I purchase $100.00 worth of clothes, which is categorized under the expense category CLOTHING. If I look at an expense categorization report, it shows $100.00 spent on CLOTHING - all is well.
2) I return the clothes, receiving a return transaction in the form of a $100.00 income transaction. However, the expense categorization report will still show $100.00 spent on clothes, which is now incorrect.

The only workaround I can think of is to create a CLOTHING RETURN 'Income' category, to provide some visibility to the fact that the CLOTHING expense category is not correct (i.e., I need to manually reconcile the 'return income' and 'expense' categories to get the actual clothes expense figure). However, this is a very clumsy and ugly kludge, for a number of reasons .

Can anyone suggest a more elegant way to handle this, which maintains the integrity of all transactions (i.e., not deleting/backing out the original expense transaction) while allowing the categorization reports to provide 'true' values (i.e., reflecting returns)?

Many thanks in advance for any suggestions!

  1. 1 Posted by dwg on 21 Jan, 2019 12:39 AM

    dwg's Avatar

    I'm a fellow user.

    When you do the initial purchase you categorise the purchase as Clothing, this is a payment transaction.

    If you process a deposit transaction for the monies receive back and also classify it as Clothing a category report will show 2 equal transaction one Debit and one Credit thus giving a net value of 0, both transaction are thus preserved but the reporting is correct.

    You could use some sort of reference to link the transactions, for example I've often used the date of the initial transaction in the form yyymmdd

  2. 2 Posted by -Kevin N. on 21 Jan, 2019 02:42 AM

    -Kevin N.'s Avatar

    Hi DavidH,

    Whenever I have a return purchase, I do what dwg suggested .

    Simply use the same expense category for the return that you used for the original purchase.

    The 'Memo' fields can be used to reference the original purchase and the return.

    Easy-peasy.

    -Kevin N. (not a member of MD support)

  3. 3 Posted by David Horton on 21 Jan, 2019 06:21 PM

    David Horton's Avatar

    Hi -

    Yes, I realized that right after submitting the question. That's what I
    get for trying to do too many things at one time on little sleep. Thanks
    for the speedy response.

    David

  4. System closed this discussion on 22 Apr, 2019 06:30 PM.

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