This page documents how Firefly III handles outgoing loans (liabilities). For example: you borrow money to friends and family. In Firefly III you select "I am owed".
In Firefly III v6.0 the way these liabilities are handled will change. This means change for you as well.
In v5.7 the liability is like a bag of money. To borrow money to somebody, you first put money into the bag (asset -> liability). Then, your friend takes it out (liability -> expense).
Getting money back is the same in reverse. Your friend pays back (revenue -> liability) and you have to get it out of the bag (liability -> asset).
In v6.0 it's a one step process. In 6.0 the liability is the loan. To borrow money to somebody you send it to the liability (asset -> liability). That's all. Getting money back happens when you transfer money back (liability -> asset).
- The account balance for a loan in v5.7 is usually 0.00. The account balance for a loan in v6.0 is a positive amount.
To make sure nothing changes too much between versions, make sure your liabilities have a balance of zero (the amount due doesn't matter).
In this table you see four types of transactions and what they mean in v5.7 versus v6.0.
| v5.7 | v6.0 | |
|---|---|---|
| Withdrawal from asset to liability | You put money in the "bag of money". This does not change the amount due, the money is not yet with the borrower. | The money is part of the loan and with the borrower, so the amount due rises. |
| Deposit from liability to asset | You take money out of the "bag of money". This does not change the amount due. | The borrower has paid you back (part) of the loan. |
| Withdrawal from liability to expense account | The money goes to the borrower and the amount due rises. The liability balance is usually "0" after this. Your net worth drops. | You decrease the amount due by removing money from the loan. This could be loan forgiveness, for example. The money that flows out of the liability is no longer part of your net worth. |
| Deposit from revenue account to liability | Money is paid back by the borrower. This money ends up in the "bag of money". The amount due drops. The net worth goes up. | The balance rises and so does the amount due. Such a transaction is something like interest. Your net worth rises. |
As you can see in the table, there are differences between these transactions and what they do to the liability.
This table denotes how Firefly III will deal with these transactions. In this example, the initial net worth is € 1000. The "balance" and "amount due" columns refer to a single liability's balance and amount due.
| Action | 5.7 | 6.0 | ||||
|---|---|---|---|---|---|---|
| Balance | Amount due | Net worth | Balance | Amount due | Net worth | |
| Start | - | - | € 1.000 | - | - | € 1.000 |
| 1: New liability, 'I am owed this amount', start amount is € 500 | € 0 | € 500 | € 1.000 | € 500 | € 500 | € 1.500 |
|
5.7: The loan does not change the net worth. 6.0: The amount is now a part of your net worth. The account has different balance. |
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| 2: Send € 33 from an asset account to the liability | € 33 | € 500 | € 1.000 | € 533 | € 533 | € 1.500 |
|
5.7: Nothing changes yet. The money is in "the bag" 6.0: The amount is already considered part of the loan so the amount due increases. |
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| 3: Send € 33 from the Loan to an Expense account (withdrawal) | € 0 | € 533 | € 967 | € 500 | € 500 | € 1.467 |
|
5.7: Money is sent away and must be paid back. Net worth drops. Balance of loan is zero. 6.0: Money is spent but is *not* due to be paid back. Net worth drops. Amount due and balance back to 500. |
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| Step 4: € 5 is sent from a revenue account into the liability. | € 5 | € 528 | € 972 | € 505 | € 505 | € 1.472 |
|
5.7: Money is paid back and is in the "bag of money". Net worth and balance rise. Amount due drops. 6.0: The money is added to the liability and is also owed. Amount due, balance and net worth all rise. |
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| Step 4: € 5 is sent from the liability to an asset account | € 0 | € 528 | € 972 | € 500 | € 500 | € 1.472 |
|
5.7: Balance is back to zero. Net worth unchanged. Amount due unchanged. 6.0: The balance drops and the amount due drops. The net worth remains unchanged. |
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If you're still reading: in Firefly III v5.7 you needed two transactions to manage a incoming loans. First somebody pays you back, and then you transfer that money to yourself. This will change in v6.0.
For example, if you record one big payback worth 2000,- and you start transferring it to yourself it up in € 100 chunks, you may see different balances and amounts.
For me it also reset the "Amount due" to zero but this might be because I did something wrong. I just recreated that one from scratch (it only had 2 transactions)