Cross-payments — when one member pays for another
Families pay for each other constantly: one card settles the electricity bill, a parent pays a child's insurance premium, one account funds another's SIP. A cross-payment is Sahidha's record of that — an IOU that says "Raj paid ₹X that was really Pooja's" — so nothing gets forgotten, double-counted, or silently absorbed.
The four ways an IOU gets raised
| How | Where | What happens |
|---|---|---|
| Mark an expense "on behalf of…" | Edit any imported expense → Paid on behalf of… | The expense stays on the payer's account; an IOU is raised for the beneficiary. This is the everyday path, since most rows arrive by import. |
| Tick "on behalf" while adding an entry | New entry → expense → On behalf of [member] | Same as above, at entry time. When a beneficiary is picked, the investment/insurance/loan pickers switch to their holdings — the premium being paid is theirs, after all. |
| A cross-member transfer | Find transfers, or New entry → Transfer between two members' accounts | The pair is linked as a transfer (so it never touches Income & Expenditure) and an IOU is raised, because value moved between two people. Transfers between your own accounts never raise one. |
| A standalone IOU | Cross-payments → New | No transaction needed — record a debt directly (e.g. something paid in cash). |
Entities work the same way: an HUF or other family entity can be the payer or the beneficiary, and transfers between an entity's account and a member's account raise the IOU against the entity.
The lifecycle: pending → acknowledged → settled
| State | Meaning | Who moves it forward |
|---|---|---|
| Pending acknowledgement | The IOU exists; the beneficiary hasn't confirmed it yet. Amount is still editable. | The beneficiary (or an admin) presses Acknowledge. There's an Acknowledge all for catching up in bulk. |
| Acknowledged | Both sides agree money is owed. The amount is now locked. | The payer (or an admin) presses Settle when they're paid back. |
| Settled | Paid back and recorded. | Terminal — nothing further to do. |
Only the people involved see an IOU — each member sees the cross-payments where they're the payer or the beneficiary; a family admin sees all of them, plus running net positions per pair of people.
What settling actually records
When the payer settles and picks a settlement account (the beneficiary-side account the repayment came from), Sahidha writes two offsetting transfer legs — money out of the settlement account, money into the payer's account — and both balances move accordingly. They're transfers, so Income & Expenditure is untouched; the repayment is not income for the payer any more than the original was income for the beneficiary.
You can also settle without a settlement account when the repayment happened outside tracked accounts (cash, say) — the IOU is simply marked settled with the date.
How reports treat all this
- Income & Expenditure: the original expense reports under the payer — whoever's account the money actually left. The beneficiary's I&E never shows it. Settlement legs are transfers and are excluded too.
- Member summary (Categorize → Transfer summary and On behalf tabs): the netted picture. Every inter-member transfer and IOU rolls up into one balance per pair of people — net positive: they owe you; net negative: you owe them — expandable down to the individual account pairs and rows behind it. The On behalf tab breaks the same data down by category and by what the payment funded (an investment, an insurance premium, a loan, or a plain expense).
Undoing things
- Clear the on-behalf marker on the transaction (pick "— not on behalf of anyone —" and Apply) — the IOU is deleted. If it had already been settled, the settlement legs are reversed first and both balances are restored.
- Unlink the transfer (for IOUs raised by a cross-member transfer) — both legs revert to independent entries, and the IOU is withdrawn.
- Delete the IOU from the Cross-payments screen — same reversal rules. Payer, beneficiary, or an admin can do it.
Nothing about the original bank rows is ever lost; every one of these is reversible.
Plenty of on-behalf payments never need settling — a parent paying a child's premium may just be how the family works. The IOU is still worth recording: the On behalf summary then shows who funds what over the year, which is exactly the picture you want at tax time (who really paid that 80C premium?) even when no money ever flows back.