Uncleared Balance

1

I have one request if it makes any sense to you.

At the homepage balance sheet and other reports, the bank balance is displayed including the uncleared payments or deposits. I understand the intent but it is misleading because the total doesn’t match the amount displayed in the bank statement. Thus, I suggest breaking it into two parts: Bank Balance as it is should display the actual amount in bank only. Uncleared balance should show the details of uncleared deposit/payments.

Hope you find this a sensible update.

2

It makes absolutely no sense at all and it’s not misleading. Accounting is a double entry system, so if you adjust as you suggest the BS Bank account because it doesn’t match with the Bank Statement balance then the BS wont balance. To reflect what you suggest would also mean adjusting the other BS & P&L accounts that make up that Bank account / Bank Statement difference .

Lets assume there is a single uncleared deposit made up of several items: Accounts Receivable receipt, proceeds from a Fixed Asset sale and Cash Sales. All these accounts would also have to show Bank Account like variances to keep the reports balanced.

Now what if there were 3 uncleared deposits and 12 uncleared payments, you would have adjustments all over the place and you would never have an accurate reporting position.

The BS is a snapshot of the business at a point at time based on the accounting transactions posted to date, and there will always be timing differences - the supplier payment is still in the mail.

However, if you want your BS Bank account to equal the Bank Statement balance then you can do your own update - by only posting transactions after they are cleared on the Bank Statement.

3

I am sorry that I wasn’t very clear probably. I am not referring to anything related to accounts payable/receivable.

Please note that the only difference I am pointing out is about uncleared payments/deposits.

If I understand right, these refer to the cheques that we have already written to various people and cheques that we have submitted to our account but these balances are not reflecting in the bank statement.

Therefore, the current amount against bank balance shows that for how much amount can we write the cheque for.

So far, all great. And I really love this feature to do these entries.

Now, the problem. If I have Rs. 10,000 in my account and I have received a cheque of Rs. 5000 and written a cheque of Rs. 3000. My effective expected balance becomes 12,000 (10,000 + 5,000 - 3,000). This is what shows in the Manager against bank balance.

The problem is that Rs. 2,000 is still not cleared and writing a cheque for Rs. 12,000 may be a trouble. Also, the bank statement still shows Rs. 10,000 till these are not cleared.

All, I am suggesting is to break this bank balance into two components - Cleared Balance & Non Cleared Balance - Rs. 10000 and Rs. 2000 respectively.

By looking at this, I know that I can write the maximum amount of 10,000 right now because Rs. 2,000 is not yet cleared. Also, it becomes easier to match the daily sms received from bank.

Hope I am a little more clear this time.
Som

4

@shekharsom, you should not hold out hope for such a change, as it would run against all standard accounting practice. A balance sheet shows the true position of a company at a moment in time. The fact that some of the transactions are in various stages of processing does not alter that position. For example, you may have written a cheque that has not yet been presented by the recipient and cleared through to your bank account. But you cannot unwrite the cheque. So the balance sheet shows it as having been deducted from the bank account asset account.

Nevertheless, you can very easily get the information you want. When you first click on the Bank Accounts tab, the statement and actual balances are both clearly shown, along with all uncleared transactions. The accuracy of this information depends on how disciplined you are in updating the clearance status of transactions. But the same would be true for your requested, non-standard balance sheet format.

5

Manager is an accounting recording/reporting system based on your data input and doesn’t have an interactive connection with the Bank. Therefore, how does Manager know what your Bank is doing with deposits and payments on a hourly/daily basis without doing constant bank reconciliations - in which case the Bank Reconciliation report would provide the information you require without interference of the BS.

Can I suggest that the accounting principles have been around for a few thousand years and if your “makes any sense” had any foundation, I am sure it what have been adopted well before now.

6

Hi All,

I do now know why do you all think that I am talking against accounting principles. I am extremely sorry if I sound so. I respect accounting principles a lot and think that they are just next to Maths in terms of clarity.

Also, to be clear, I understand why Manager shows what it shows.

I am asking about a display change to show how much is a cleared balance. I do update any change in the status of a cleared cheque diligently.

Currently it shows

Cash at Bank - Rs. 12,000 [10,000 + 5000 - 3000]

I am suggesting to show:

Cash at Bank (Cleared) - Rs. 10,000 [actual balance]
Cash at Bank (Uncleared) - Rs. 2,000 [+5000-3000]
Net Cash at Bank - Rs. 12,000

The net still remains the same at Rs. 12,000 and same effect on Balance Sheet.

But if noone else needs it except for me, then no need to make any changes. I am already used to it.

7

The Summary display was changed a few months ago to emphasize the balance sheet (and the left side was renamed as such) rather than the previous “Position.” This was done to promote better awareness and acceptance of standard accounting practice, especially among inexperienced users. I’m fairly certain it won’t change back.

I fully understand what you want. And I will re-emphasize that the Bank Accounts tab actually gives even more information than you requested, breaking down your requested uncleared category into both uncleared deposits and uncleared payments. That information is one click away and is on a screen you must go through before entering a payment anyway.

8

Ok. No problems.

Thanks :slight_smile:

9

Manager used to break-down uncleared payments and uncleared deposits but most users found it very “non-standard”. I actually came to agreement with this view after a while.

So, balance sheet (and thus summary page) will show real bank balance. If you want to see break down: statement balance + uncleared deposits - uncleared payments as separate figures, then you need to go to Bank accounts tab. Or view bank reconciliation report.

10

@Lubos,

I would have liked that view. Probably never saw that view because i didn’t update for a long time.

But if most users like it this way, I am fine with it too. It is already great as it is right now.

About accounting standards, I am very sure that it is equally fine to show a breakup of cleared and uncleared balance. It’s just a display and balance sheet will match still.