Hi,
I am using this software for recording personal income & expenses. I don’t do any additional manual entry. I just upload a bank statement & check them.
My current closing bank balance in “Cash & cash equivalents” is showing a correct amount according to the bank statement which is Rs. 20,800.06. But, at the bottom, it shows “Net Loss = Rs. 15,140.58”. Can you please help and clear me over this difference.
If I am just uploading the bank statements, then “Net Profit/Loss” should be equal to “Cash & cash equivalents”, Then where am I going wrong? Please help.
Assuming that all of your imported/uploaded bank statement entries are complete and correct, it is possible that the date ranges used for display and reporting in Manager that you are viewing, do not correspond with those of your source (ie your bank statements).
Okay… So how do I solve this problem?
OK - Based on your description of your Manager installation, you are only recording cash entries. It therefore would follow that the only account in your chart of accounts that you have in your Balance Sheet is your Bank Account. The remaining accounts will be in your Profit and Loss area of your chart of accounts.
Assuming that this is the case:-
The basic summary page or home page of Manager is displayed using a range of dates. This is set or changed or edited by clicking on the “Set Period” button near to the top left. If you set that date range to the same range as that of your bank statements, then the summary should display the same information as that of your bank statement. This of course assumes that you started with a Zero/Nil balance in your bank account at the starting date. However, Profit is a measure of movement between one point in time and another. If your bank statement started with a value different from Zero/Nil, Manager will simply display the product of all of the movements in and out, and is an illustration/example of Profit not being wholly or in some cases, not directly related to ‘cash in the bank’.
The same applies to the reports section on Manager if you are using those.
There are other possibilities as well, but without knowing the structure of the balance sheet area of your chart of accounts, it is difficult to be more specific.
Ok. I’ll check that. Thanks for your help.
Thinking about this, it is probably much better to simply accept that profit is not really directly related to cash at the bank.
For example:-
Say you have 100 in the bank. You use that 100 to buy a “widget”.
At this point, you have made a 100 loss in your P&L, and have nothing in the bank.
Meanwhile, you sell your “widget” for 200, and put that in the bank.
At that point, you have 200 in the bank, and made a 100 profit in your P&L.
The profit is the product of a payment of 200 from the customer, less the cost of 100 to the supplier.
The 200 in the bank is now the product of the 100 that you started with, plus the 100 profit that you made when selling the ‘widget’.
Yes, I agree. But, I found where the problem is.
Current situation:-
Rs. 35,940.64 (Last year closing bank balance) - Rs. 35,303.03 (Current year closing bank balance) = Rs. 637.61 (Net Loss)
Why is it comparing last year’s closing balance to show this years bank balance or profit?
It should be (Last year’s closing balance + Current cash additions - Expenses and taxes = Net profit)
Net profit should reflect the same as in bank balance if I’m following cash basis accounting system.
Here lies the problem. What do you say?
What a joke. I again found some new.
Further getting deep into the issue, by comparing bank statements, the difference of “Deposits” and “Withdrawals” is also Rs. - 637.61.
i.e:- Closing Balance + Deposits - Expenses = Net Loss of Rs. 637.61
Now I’m clear. Problem is solved and “Manager” is correct. 
Thank you very much for your time & explanation @xero50. Thanks a tons. 
I was just drafting a further note when your last one appeared…
Well done - - - we got there in the end 
1 Like