Bank Recon Issue

Hi all. Using Manager Desktop 18.11.53.
Attempting to reconcile a liability “bank” account from insurance provider. Previous statement had credit (to us) balance (positive $27.33).
When the insurance company sends a statement with upcoming charges, they are “in advance” of the statement. In this case, the Sept 26, 2018 statement itemizes charges that will be due in the upcoming month of October. Transactions were entered with an October date, but have been “Cleared” as of the statement date of Sept 26. The reconciliation does not appear to recognize the transactions for the Sept 26 clear date as they are dated in October. Transactions are entered as “Payments” from the liability account to create the liability payable.
Changing either the transaction dates to September or the Recon date to October will reconcile the account, but the dates would not be reflective of the financial situation. Screen shots below.
Thanks for any help or is this a programming issue?


I don’t understand what you are trying to achieve with an Insurance liability account?

Would it not be easier to use a Supplier account and enter the amounts into that ?

But maybe I am missing something

Let’s begin with the fact that you should not be using a bank account to record insurance premiums charged or paid. So your descriptions of what you are doing and the “problems” you’ve encountered are totally confusing. Bank accounts record movements of money into and out of a financial institution.

Your insurance provider is a supplier. Any premium charged that is not paid immediately should be recorded via a purchase invoice, which will create an account payable. You might or might not get fancy with deferred premiums. Whether you do or not, the bank account only comes into play when you pay the premium, discharging the liability created by the account payable.

Hi and thanks for the responses. Sorry to not be clear.
The insurer offers a credit payment system as part of their service, so once the insurance premium is posted to the account, there is a liability created for future monthly payments against the insurance cost, hence the liability account in the G/L. The insurer then becomes a “financial institution” as to the way we are keeping books. We post the insurance cost (debit) to the appropriate expense account and the credit to the Insurance Payment Due Liability accounts. Monthly payments are then posted as a credit to cash and a debit to the liability. Consider it another form of “Credit Card”. The reconciliation function should still work to recon this account as it is set up as a bank account just as are the credit cards in use. Scott

This still does not make sense. The insurer cannot be a financial institution the way a credit card issuer can, because you cannot pay for things via your account with them. They are not a store of value or source of payments the way a bank is. You have not made it clear whether you are prepaying premiums and transferring a portion of them to current expenses as they accrue or what. But if you are prepaying that way, unaccrued premium payments are an asset, not a liability.

I don’t know how I could make this any more clear.
The institution has both an insurance component and a banking component (yes, they are a bank too).
They charge out our insurance cost to the credit portion of the bank and we then make payments on them. There is no prepaid expense about it as we are cash basis and expense the insurance when we receive the charge. Please, no offense, but you are getting off point with the discussion. The issue is that the transactions on the reconciliation seem to be being looked at by transaction date instead of clear date.

This is the first time you have mentioned this. However, you have not said whether you are actually depositing money with them. In other words, are you using them as a bank? So far, you had me thinking the money was coming from some other bank. Even if so, the insurance portion of this entity’s business should not be set up as a bank in Manager. That should still be handled as a supplier. A large organization with multiple lines of business, one of which happens to be ordinary banking, cannot be treated as a bank for all of its different business lines.

What do you mean by “credit portion of the bank?” Real bank accounts will have both debits and credits applied (deposits and withdrawals).

Who or what is “them?” Are you referring to insurance premiums? Or do you mean the banking portion of the business? This is sounding more and more like a simple automatic bill paying service, where you have authorized the insurance business to deduct premiums from a bank account, which happens to be maintained under the same business umbrella. If so, you are making it far too complex. You should just enter an ordinary payment from the bank account each month for the premium cost. Forget the fact that your insurance supplier and bank happen to be under the same roof.

You have misused the program by entering clearance dates prior to the transaction dates. Manager ignores transactions until the transaction date arrives. The purpose of clearance dates is to reconcile pending transactions that have been entered but which do not yet appear on the financial institution’s statement, like an unpresented check. So the reconciliation process only works within that concept.

You seem to have constructed an illogical workflow (time moving backwards) with a supplier as a bank to handle a very simple situation. If I am still misunderstanding your situation, you need to describe the circumstances in greater detail.

Hi Tut. Thanks for your continued comments.
Regular deposits are made into a traditional checking account with the institution (banking component). We receive monthly statements for this account.
This is set up as a Bank Account within Manager and is summarized into a control account on the balance sheet Assets>Bank Accounts.
Credit is extended from the insurance company when premiums come due and is shown as a liability payable on the separate insurance statement we receive from them. This statement (the insurance company not the bank side) has future dated transactions on it, as in the example (statement dated 9/26 and transactions for premiums dated 10/5 and 10/19), which are due and payable on the next payment due date in October.
This insurance account is set up as a Bank Account liability (due to it’s credit component) and is summarized into a control account on the balance sheet Liabilities>Insurance Payable. This is identical to the way a credit card would be setup under the liability option in the Manager Guides.
We then make manual monthly electronic transfers from the checking account to the insurance account to relieve the liability. They are not automated as the amount is different each month.
Even though it may seem illogical and/or complicated to you, we wish to be able to perform a reconciliation of the statements we receive each month from the insurance company and setting them up as a Manager Bank Account is the only way to facilitate this.
If it is the case that the reconciliation function will not ever recognize future dated transactions I will have to rethink this. It seems “illogical” to me that “Cleared Dates” for future charges would be ignored where we could not recognize the liability in the following month.
Thanks again for your thoughts.

Here is the crux of your problem, easily understood now that you’ve fully explained the circumstances. These are not real transactions. As you have described them, they are effectively courtesy notices of upcoming sales invoices from the insurance side, which you should enter as either (a) purchase invoices if they will be paid later or (b) payments if they are paid immediately. These should be entered on the actual transaction date, not the date of notification. You don’t really owe them the premium until the future date, so there is not yet any liability, no matter what they call it.

There is an important difference. When you use a credit card, the purchase has been completed on the day of the charge. The liability option is a way of showing that the credit card issuer has effectively loaned you money to cover your purchase. You actually owe them the money as of the purchase date. On the contrary, you do not owe the insurer the premium until the future transaction date.

Yes, you will, because the capability is designed to reconcile real payments that simply have not yet cleared through the system: examples are checks that have been written but not deposited by a merchant or credit card charges that have not yet shown up on the card statement. In your situation, the advance notice of a future amount due is not a pending transaction. Nor is it yet a liability for you. Eventually it will be, but not until that future date.

Accounting is about recording what has happened, not projecting what might or will happen. Neither your current financial position (as reflected on your balance sheet) nor your financial performance (as reflected on your profit and loss statement) depend on future events. Liabilities are part of your current position, and since they don’t exist until the actual transaction date, they have no place on your balance sheet.