Why are Bank a/c In & Out ADDING to Actual Balance

Apologies if this is something super simple that I am just misunderstanding.

Account set up for a Visa credit card
when I make a payment with the card it shows a - in red for the amount and this adds to the Actual Balance.

When I make a transfer to pay off the balance it shows the amount in black
(so far so good)
BUT the Actual Balance INCREASES - surely it should decrease by the amount of the transfer.
ie. both In and Out are ADDING to the Actual Balance- -see attached photo.

thank

s for your help

Can you show more details, post a wider picture of that screen, I want to be able to see the nature of transactions (Inter account transfer, payment, receipt) with the entries. You are definitely not understanding something

Thanks for the reply Abeiku.

I realize now that what’s happenings is:

payment using card (eg -$30 in red) is SUBTRACTING to the balance
transfer to pay this off ($30 in black) is ADDING to the balance

so i guess the question is - how do I reverse these?

larger

photo attached.

Please, do you have any accounting background?

All the figures in black are inflows into the credit card account and all the figures in red are payments or outflows.

You have to explain what you are trying to achieve.

Everything is working fine if you ask me.

thanks for feedback. No accounting background.

If I charge $30 on my Visa card and enter -$30 then when I transfer $30 to the account to pay off the $30, why doesn’t it show $0.

On the photos I attached, the balance goes up and up every time I pay off charges - but surely it should ebb and flow, up and down as the credit card is used and then paid off.

for example, in the screenshot:
balance shows $5374.01
then I pay off $2259.68
but instead of deducting this from the balance, the balance goes up to $7633.69 - which is related to nothing at all.
The numbers come from conscientiously entered charges (payments made with the card) and transfers (pay off card) - these should balance to zero at the end of the month or have a slight balance due to overlap of dates.

According to the Actual Balance there is $7625 more in the account than I have spent - which is obviously nonsense

Have you setup the credit card account as described in the guide Set up credit cards

Show the edit screens for your credit card account and transactions.

It looks like it has not been setup correctly

Correct - now show the edit screens for the transactions

photo credit 4 - shows how I enter a payment made using the credit card

photo credit 5 - shows how I make a transfer from a bank account to pay off the amount charged to the credit card

I need to see data in those screen shots and then the result in a drill down of the credit card account

Also show your chart of accounts - where have you put the Credit card account - is it an asset or a liability account?

Finally what version of manager are you using?

Here is an example I have just setup in a test business - I can assure you that everything works exactly as it should



Hi

using 20.7.10

Here are the screenshots

The Chart of Accounts does not show ANY bank accounts - not sure why not. What have I not set up correctly.?

Drill down from your Summary Page with screen shots each time

Your bank accounts and credit card will show up under Cash at Bank

Payments made by a credit card will subtract from the balance - as you see above
Transfers in to clear the balance add to the balance
The balance is usually negative until it is cleared

Where does the balance of 5,720 come from?
Did you set up starting balances?

the balance 5,720 comes from the In and Outs over 2 + years. Here are the first transactions.

There may be a few transactions I’ve missed, but not so much that the account now shows a surplus of 5,700+

It looks like you have errors in your transactions going back to the beginning but without seeing the Edit screens, which you refuse to show, I can no longer help

Sorry

Okay thanks, I’ll go through all the transactions once again. Thanks for your guidance.

@MarineDieselBasics, only a few things can be discerned from the information you have been willing to show. (Blank input screens are not useful. We all know what they look like.) Here is what we can tell:

  • You wrote that you are having problems with a VISA card. But you have no VISA card in Manager. You have only an American Express card. I will continue on the presumption this was an error in your first post.
  • You have no control accounts made up of bank accounts. Therefore, your credit card is set up as a subsidiary ledger of Cash at bank, a default control account. That is where all transactions on the card are reflected on your balance sheet.
  • Since you left the credit card in the default control account, it is set up as contra asset account, one of the two options described in this Guide: Set up credit cards | Manager. This is perfectly fine.
  • A contra asset account normally has balances with reversed signs, as mentioned in that Guide. A credit card charge creates a liability for your business to pay the card servicer. If displayed as a contra asset account, that liability shows as a negative asset. So when you purchase something with the card, the balance of the subsidiary ledger for the credit card moves in the negative direction. (A negative asset is a liability.) When you transfer money to pay off the card, it moves in a positive direction. This is exactly the behavior you described when you wrote:
  • If you want to reverse that behavior, as you inquired, you need to set the credit card up as a liability account, following the procedures in the Guide already linked. To do this, you will not need to alter any transactions. You only need to create a custom control account and assign the credit card to it.
  • As a side note, because both your regular bank account and the credit card are in the same control account, the balance of Cash at bank on the balance sheet will not change when you make an inter account transfer.

Now let’s turn to the credit card balance of 5,720, a totally different problem. Because your card is set up as a contra asset account, that positive balance means the credit card servicer owes you 5,720. Assuming that is not the case, where should you look for problems? Here are some thoughts:

  • You have some strange content in your earliest transactions. What, for example, does “transaction creates neg balance on Amex in order to balance” mean? Did you make some kind of irregular entry to force a balance to zero? Whatever transaction this is, Manager believes you paid Simplii 220.78. This, of course, drove the balance in a more negative direction.
  • How can the source of your statement payment not be clear? If it came from your business bank account, it should have been entered as an inter account transfer. If you paid the card balance from personal funds, that should have been entered as an expense claim. If you paid off the card balance in some months, but made no entry, Manager would be showing that the balance was too negative, not too positive.
  • You cannot say “numbers come from conscientiously entered charges (payments made with the card) and transfers (pay off card)” and then say, “There may be a few transactions I’ve missed, but not so much that the account now shows a surplus of 5,700+.” If you missed transactions, how do you know?
  • You can use Manager’s bank reconciliation process to identify the problems. Of course, you will need past statements. During reconciliation, be sure to enter the credit card balances as negative numbers when you owe money on the card.
2 Likes