DESKTOP EDITION CLOUD EDITION SERVER EDITION GUIDES FORUM

Manual Bank Reconcile by Transaction


#1

Maybe I am missing something, but I have always reconciled bank accounts using one closing amount and selecting the transactions that have cleared. Is this not possible in Manager? Also, where can you view cleared vs uncleared transactions?


#2

My view is that only “cleared” transactions should be recorded under Bank accounts tab. If only cleared transactions are recorded, then there is no need for manual “ticking process” which can take considerable time on bank accounts with many transactions (not uncommon).

So what to do with “uncleared” transactions such as unpresented cheques? Manager doesn’t have a good way of recording these but that is about to change. I’m planning to solve this by end of this month.


#3

Lubos, I have a different viewpoint. Once a check (or cheque) is written, that represents a claim on company assets. One might technically think of it as a liability, like an account payable. But it is important for company accounts to reflect the fact that the bank account asset has at least been encumbered, if not yet actually reduced. How else does one avoid overdrawing the account?

In my experience, normal accrual accounting considers the payment transaction from the bank account to have been made (and therefore recorded) once the check is written. The reconciliation workflow is merely a verification process. It lets you determine whether the payee has presented the check for payment. It confirms that the amount you recorded matches the amount you wrote. It verifies the bank paid the correct amount. So reconciliation isn’t actually part of accrual accounting, but a way to detect errors.


#4

@Tut, the cheque module will allow you to specify bank account so for financial purposes the cheque will decrease the bank account balance. It’s just that to me, cheques are the only transactions which can ever have “uncleared” status therefore if you are using upcoming cheque module, there is no need to tell Manager which transactions are cleared or uncleared since Manager will already know it.


#5

@Lubos, if I understand you correctly now, I agree that what you describe is financially sound. As long as writing a check in Manager decreases the bank account balance, things are fine. Am I correct that you were using “cleared” versus "uncleared status to refer to whether all the pertinent events had occurred? In other words, if money were spent from a cash account, that would be a “cleared” transaction? But if a check is written, the transaction remains “uncleared” until the check is presented for payment and processed by the bank(s)?

And I assume what you mean by saying “Manager will already know” which transactions are cleared or uncleared, you are referring to bank accounts with online statement access, allowing Manager to reconcile automatically? If that’s what you are implementing, I’m very impressed.


#6

@lubos, it’s not at all uncommon for us to close out a month with “pending” debit card transactions or ach transaction. @Tut is correct. The purpose we do a reconcillation is to provide a checks and balance for data entry and processing. That checks and balance does not exist when blindly entering period totals. The system you are describing would allow for Manager to “reconcile” two seperate, but offsetting data entry errors. No effect on on the over all balance, but it will effect the expense classification.


#7

I find reconciliation difficult with one of my clients because 95% of the payments they receive from customers are by debit card. The date that goes on Manager is the date on the pdq receipt but this is anything from one to three days before the date on the bank statement. I have no access to the company’s bank account and receive a print out of there statement once a month. Agreeing that statement to Manager is time consuming without being able to just ‘tick’ items cleared.


#8

I agree with @patchworkfields
Being able to ‘tick’ off transactions would save some time as currently i have to check the transaction dates on bank statement then change the date on Bank account transaction tab to run in-line with each other.


#9

OK, it’s clear to me bank reconciliation will need to be improved to accommodate for these use cases.

I’m planning to release cheque module before end of this month, right after that, I will be working on new bank reconciliation process.


#10

Not recording transactions until after they have cleared the bank defeats the whole purpose of recording them in the first place for me. I might as well just log into my bank account and claim that what’s in there is available. The reconciliation process for this program is the only thing about it that I don’t like AT ALL. I want to record my credit and debit card receipts the day I run them, not 3-4 days later when they hit the bank. I want to compare my bank statement to what’s recorded in the program to see if I’ve missed anything. Check boxes next to each transaction works well in the other programs I’ve used. The other thing about the reconcile module that I do not like is that it asks for the daily balance from past dates, My online banking doesn’t show that, so I either have to get out pencil and paper and a calculator and figure it out by hand or just copy the daily balance from the program and force balance, which again defeats the whole purpose of reconciling in the first place.


#11

I will not go so far as to say I don’t like the reconciliation process AT ALL, like @Sarah1. In many ways, it is quite convenient. But it does leave me feeling uncertain that the actual transactions match, not just the total.

I wholeheartedly agree that one should be able to enter the transactions on the dates they occur. Occasionally, after all, they never clear the bank due a merchant error. I particularly have problems with transactions still in the “float” period. The money has been obligated, but not cleared the bank. The reconciliation process should at least allow you to make that indication.

The checkbox approach seems best. If there are only a few transactions, one can do all right by scanning the ledger list. As transactions multiply, though, they often are recorded by the bank out of order, and it is hard to keep mental track jumping back and forth between the bank record and Manager.


#12

I was looking for a simple accounting package that was free. I found it with your program. Previously I use spreadsheets in excel and wanted a little more automation…However in excel I was capable of seeing exactly what cleared my bank and what exactly was pending. verifying the balance was correct was also a plus. Due to the fact your program doesn’t have a simple reconciling ability I will be deleting this program in favor of something like gnucash. Thank you for trying to build a program though.


#13

Subsequent to my last post on Cheque due date reminder, and your solution that I should log them under uncleared payments (This helped me, thanks!), my next concern is that I want to do the reconciliation manually.

i.e. - I want to be able to move from Uncleared payments to Statement balance for each transaction that actually clears in the bank - without doing a full statement reconcillation. The full statement would not work for me, because there are small charges of AED 1, or AED 2 or AED 20 as bank charges which I dont always record.

So a manual way of clearing payments would really help! Thanks in advance :smile:


#14

Lubos - Saw the solution implemented on the cloud version today. Fantastic stuff! Thanks! You have solved this issue!


#15

Had a panic attack on starting manager today because none of my bank balances as per statements agreed. Then noticed that all the original opening balances are not showing as cleared.
Help please.


#16

@patchworkfields, thanks. It should be fixed now.


#17

Thanks for prompt correction. Looks like reconciliation much easier now.