How to Keep Track of IOUs: Paper, Spreadsheet or App?

Three honest systems for tracking IOUs between friends — what each one costs you, where each one breaks, and the three details every IOU record needs.

An IOU you didn't write down isn't an IOU. It's a feeling. And feelings about money have a half-life of roughly two weeks, after which the £30 you covered at dinner becomes "twenty-something?", then "did she ever pay me back?", then a tiny permanent asterisk next to a friend's name. Tracking IOUs properly is the least romantic act of friendship maintenance there is — and one of the most effective. (It's also step one of basically everything in our complete guide to money between friends.)

There are three honest systems. Here's what each one actually costs you.

What every IOU record needs (whatever system you pick)

Before the systems: the data. An IOU record that will still make sense in three months has exactly three parts:

1. The amount. Obviously — but pinned down at the time, not reconstructed later from two people's optimism.
2. The reason. This is the one everybody skips and everybody regrets skipping. "£30" is a number; "£30 — your half of the birthday present for Dan" is a memory that defends itself. When the reason is attached, nobody has to trust anybody's recollection.
3. The date. Debts age differently with a timestamp. "That tenner from March" gets repaid; "that tenner from… whenever" gets awkward.

Amount, reason, date. Any system that captures all three will work. Any system that doesn't will eventually produce a conversation that starts with "no, remember, it was—" and goes downhill from there.

System 1: Paper (or the notes app)

The oldest system, and honestly not the worst. A dedicated page in a notebook, or a pinned note on your phone: Jamie — £25 — festival ticket — 12 June.

Where it works: it's instant, it's free, and writing something down by hand has a pleasing finality to it.

Where it breaks: it's one-sided. Your notebook is your version of events — Jamie has never seen it, doesn't know it exists, and when you eventually produce it, you're asking him to accept your private records as fact. It also has no running balance: five entries about the same person means maths at the exact moment you least want to be doing maths. And notes apps have a special talent for burying the IOU note under forty shopping lists.

System 2: The spreadsheet

The engineer's answer. Columns for who, what, when, how much; a SUM per person; maybe conditional formatting if you're feeling fancy. Shared via Google Sheets so it's no longer one-sided.

Where it works: total control, real balances, genuinely shared truth if you share it. For a flatshare with regular recurring costs, a well-kept sheet is legitimately good — we even recommend one for rent-splitting arrangements.

Where it breaks: maintenance. The sheet is only as good as its most recent entry, and entering "£7 — pizza — Tuesday" from your phone, in a spreadsheet, at a bus stop, is exactly annoying enough that you'll do it later, which is to say never. Every abandoned IOU spreadsheet died the same death: not disagreement — friction.

System 3: An IOU tracker app

Purpose-built apps exist because the first two systems keep failing in the same two places: they're either one-sided or high-friction. A good IOU tracker fixes both — logging an entry takes seconds, the balance calculates itself, and both people can see the same record.

The checklist for choosing one:

• Free without a catch — no ads between you and your balances, no entry limits.
• Friends don't need the app. This one's decisive. If logging "Sam owes me £20" requires Sam to download something and register, most IOUs will simply go unrecorded — Sam's participation should be optional, not a prerequisite.
• Reasons and history. Every entry should keep its why and its when, with a visible history if anything changes. This is what turns a reminder from "you owe me money" into "the app says £45 from the theatre tickets" — a fact, not an accusation.
• Both directions. You want one list covering money owed to you and money you owe, because pretending the second category doesn't exist is how everyone else's spreadsheet works.

This is, unsurprisingly, the shape of PayMeLater — free, no ads, reasons on every entry, friends welcome but never required. We compare it honestly against the group-expense heavyweights in best free Splitwise alternatives.

The habit that makes any system work

Whatever you pick, the system succeeds or fails on one habit: log it when the money moves. Not tonight, not "when I'm at my laptop" — at the table, in the ten seconds after the card machine beeps. The half-written record from the actual moment beats the perfect record you were going to make later, because later doesn't exist.

And once it's written down, the hard part of IOUs — the asking — gets easy, because you're no longer asking anyone to trust your memory. You're just reading out the receipt.