Does it conceptually bother anybody else that a negative amount in the Transactions sheet against a credit card account makes the account balance go up in the balances sheet?
Great observation…I get it, and if this were traditional, double-entry accounting, as you know, the polarity of the numbers would be generally positive.
For me, I view the Transaction sheet as one, huge collection of things that primarily affect cash flow: cash in, positive. Cash out, negative.
Keeps me balanced. Otherwise, I might loose sleep over insightful questions like yours.
Agreed, @Brad.warren. Tiller at its core is definitely centered around a cashflow perspective.
@brasten, the negative transaction amount causing a positive balance for credit card accounts doesn’t bother me too much since Tiller allows me to qualify an account as an asset or a liability. Everything is properly organized on the balance sheet, so things are pretty straightforward. Another point to observe is that this behavior tracks with how most credit card providers report balances. The balance shows how much you owe the lender, so a positive balance means you owe them that amount, and a negative balance means they owe you the amount, either through a bank transfer of the balance, or applying the balance credit to future transactions.
Great comments! Let me throw a couple additional thoughts out there and see if it changes anybody’s mind:
We get the amounts from Yodlee as positive amounts and make them negative if they are marked as debits. It seems weird to me that we selectively modify data in that way. They almost certainly do not show up on most of our accounts’ websites or statements as negative values. The exact code happens to be this:
return ( type == 'DEBIT' ? (amount * -1) : amount ).toFixed(2)
That only works because Yodlee’s concept of DEBIT and CREDIT is a little weird in my opinion. My understanding is that a transaction that makes a liability account account balance go UP is in fact a CREDIT.
Second thought: in a hypothetical world where Transactions could fill across more than one sheet – imagine a “Bank Accounts” sheet and a “Credit Cards” sheet, for example – would the negative amounts still make sense?
Would a separate Inflow/Outflow columns with positive values make more sense?
Much of this depends on your frame of reference. Here are some basics. Assets = Liabilities + Equity (A=L+E). Or A-L=E. Look at your balances tab. A is on the left and L and E are on the right. In the middle is the equal sign. Thus, A=L+E. Debits are on the left and credits are on the right. Debits are positive, credits are negative. A’s have debit balances and L+E have credit balances. A’s increase with a debit and L+E increase with a credit. A’s decrease with a credit and L+E decrease with a debit. Pluses and minuses can be problematic. You can never go wrong with debits and credits. Are you totally confused yet?
Back to that frame of reference. What is your reference point? You? Or the other party? Example. You borrow $100 from the bank. You get cash and owe a debt. Cash is an A and it increases so that is a debit (plus). You now have a loan due to the bank. The loan payable is a L and it increases so that is a credit (minus). +100 and (100). We balance. How does the bank record the transaction? The bank’s cash (A) decreases so that is a credit (minus). The bank increases loan receivable (A) so that is a debit (plus). (100) and +100. We balance. Notice that your transaction dealt with A and L. The bank’s transaction dealt with two A’s.
So, is the cash a debit or a credit? For you it is a debit. For the bank it is a credit. You have a payable (L) and the bank has a receivable (A).
On the income statement, expenses are debits (plus) and income items are credits (minus).
Now, replace bank with credit card company (CCC). You make purchases with your credit card. Generally, you debit expense and credit loan payable. The CCC credits cash and debits loan receivable. After charging $500 of purchases for the month, your loan payable to CCC is $500 and the CCC’s loan receivable from you is $500. You pay it off in full. You credit cash and debit loan payable. CCC debits cash and credits loan receivable. So now your loan payable is paid off in full and CCC’s loan receivable is collected in full.
Sometimes it helps to see it all written down. So, what is the question now?
This is a great write-up, Blake, thank you!
All the other details aside, this is exactly my concern.
I think this video sums up your points in 2 minutes @Blake ?
(thanks @Janelle for sharing the with me )
This is right, from what I’ve seen in general, a CSV export from the bank includes a column that has the “type” (credit/debit), which if we included in Transactions sheet along with the account type associated with the transaction could clean things up without needing separate transactions sheets (e.g. Bank transactions, credit card transactions), which I am pretty strongly not in favor of as it (separate transactions sheets) introduces unnecessary complexity I have to coach customers on IMHO… I think the issue is that Yodlee gets it wrong sometimes (due to which POV they’re choosing to use as referenced in the video and discussion above)…
I guess that’s a different discussion, but as we introduce support for multiple currencies and transaction types (cryptos, investment asset reallocations, etc) it will make less and less sense to continue to limit the options in that regard.
Perfectly said. I am working on my next project…stocks.