How to track debts and receivables

Debt and receivables: the difference is direction

A debt is money you borrow from someone else: you have an obligation to pay it back. A receivable is money someone else borrows from you: you have the right to collect it.

Neither is an expense nor income, because the money will return. Therefore, both are recorded separately from daily spending.

What must be recorded

• The person's name: Clear and specific.
• Initial amount: The exact sum borrowed.
• Borrow & due dates: The exact dates agreed upon by both parties.
• The purpose: A one-sentence note is plenty.
• Payment history: Each installment received along with its date, until the balance is zero.

The due date is the part most frequently skipped, yet it is the most critical. Without an agreed-upon date, asking for repayment easily feels like an attack. When the date exists, you are simply following through on a mutual agreement.

Collecting without ruining relationships

1. Remind a few days before the due date: The tone becomes a helpful reminder, not a harsh demand.
2. Offer installment payments: If they are struggling, gradual installments are far better than receiving nothing at all.
3. Set a limit for yourself: Decide how long you are willing to wait and what amount you are prepared to write off. Only written-off receivables should be recorded as expenses.

Small habits that keep your list accurate

• One list for everything: Debts to family, money lent to colleagues, and customer tabs must not be scattered across multiple places. What gets scattered gets lost.
• Two-way confirmation: Send a summary via chat: the amount and due date. A brief chat today prevents a lengthy argument three months from now.
• Save the proof: Keep a photo of the transfer receipt or note the payment method on the same entry, so repayments cannot be disputed.
• Review weekly: Once a week, open your list to see whose due dates are approaching.

Tracking debts and receivables in Catatku

The Catatku app separates Debts and Receivables from daily transactions, so the list of who owes what never mixes with grocery spending. Each repayment reduces the remaining balance until fully settled, and Reminders can be set before due dates. (See details on the features page).

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Questions about this

Is money I lend out recorded as an expense?

No. That money is a receivable because it is meant to return. Logging it as an expense makes your monthly report look more wasteful than it really is, and creates confusion when the money is paid back.

What if the person never pays?

Once your own deadline has passed, write it off and record it as an expense so your bookkeeping stays honest. Consider the loss the price of learning that person's true character.

Where should bank loans or paylater installments be recorded?

They are debts as well, so record the principal in your debt list. Monthly installment payments belong in your regular daily budget, as they are fixed monthly obligations.