Another dumb question, probably and one I should have asked last year.
First off, I thought that the Retained Earnings found inside the Capital Accounts was all the retained monies from previous years and the Retained Earnings that show on the Summary page would be the running total for the year set for the summary. Is this correct?
I remember last year being able to ‘drill’ into the Retained Earnings on the Capital Accounts page and see the end-of-year changes. Now this cannot be opened - it just shows a ‘Starting Balance’ and has no line items in it. Meanwhile, on the Summary page it’s showing a HUGE number and seems to include thousands of items. You can see on the Summary Page example that I’m barely in the green for the yea ($5274.98)r yet Retained earnings is giving a number of $98,160.21!!!
What have I done wrong to cause this? I wasn’t even aware I could ‘accidentally’ send things to this account and this number is completely off of where it should be. The number shown in the Capital Accounts listing is more what I expect.
Are you speaking about the Retained Earnings shown on the Summary page or the retained Earnings shown inside the Capital Accounts? they BOTH seem to show up on the Balance Sheet - that’s what has concerned me.
I didn’t specifically set up a second Retained Earnings account. When I was setting up the company originally it asked for my retained earnings for the beginning balance.
I swear that until I did the software upgrade that I could look in (drill into) the retained earnings listing inside the Capital Accounts area of the software and it would show year ending "updates’ of the retained earnings for the year. It’s now locked and the summary page retained earnings jumped up quite a bit. I’ve only been using this software for 4 years and we generally run pretty close to the bone - our ‘profit’ at the end of the year is =/- $5000.
I’m just really confused about why the amount inside the Capital Accounts section and on the Summary page are not in agreement in any way.
Rename the capital sub account to a different name.
It is completely independent of the system “Retained earning” account and there is no reason they should have the same value.
If you drill down on each you will find each is made up of very different transactions.
I don’t know the specific build number but I downloaded it on 4-1-2022 if that helps at all. That was the last update I did before the version I’m currently on 24.1.19.1287.
Also - to Patch = I can not drill down into the account under capital Accounts. I used to be able to but no longer. I’m not sure what to rename that to either since it’s not applicable to add it to the Common Stock and it would be incorrect as Owners Capital - those are the only other accounts in the Capital Accounts section.
Choose any name you like. Best based on what transaction are actually in that account.
No I did not suggest you moved transactions in that account to another account. I suggested you give the existing account a more appropriate name.
Manager → Capital accounts tab
→ “Retained Earnings” labelled account → Click on “$46,848.42” →
What does it show and what would be a better name for those transactions?
Top right corner is Advanced query create a new query grouped by sub account
Sorry for the confusion, you probably don’t use capital sub accounts and even if you did they weren’t supported last time I looked Advance Search, Capital sub accounts, Edit columns
Okay, this is followed by a bunch of screen shots for you.
I’ve included my chart of Accounts per a request. It’s 4 pages long (I have some vision issues and my graphics card is set to a lower resolution.
I’ve attached the ‘edit’ screen for both Capital Accounts and Retained Earnings that is within that Capital Accounts section.
I’ve attached the ‘drill down’ of the Capital Accounts item - it shows Common Stock, Retained Earnings and Owners Capital. I did not, on my own, create those as accounts when I started the system and they are not in the chart of accounts. From what I remember, the system put those in for me.
And to the fact that Manager would never ask for a beginning balance in a retained earnings account: if that is true then you can’t possibly migrate a company from any other accounting program. You’d have to start from scratch and put in all the previous year’s transactions from the beginning of the company for it to be accurate. Retained Earnings don’t just go away when you switch accounting programs.
The Retained Earnings item on the Summary Page has no ‘edit’ option. It’s system created. You can drill into it and see what are likely all the transactions since the system was started - including items added at the beginning for invoices outstanding (both to be paid and to receive).
If I’m reading this correctly then, the Retained Earnings number under my Capital Accounts is simply what I had moving forward and for an actual correct Balance Sheet I would need to add that number to the system Retained Earnings number to find out the actual Retained Earnings of the company, yes? these seems a bit convoluted but there appears to be no way to combine those two items - or am I missing something?
Thanks again!
To move things along, @KrisK, let us use correct terminology. You have been referring to a retained earnings account that is part of or subsidiary of a capital accounts section or a capital account itself. That simply is not true and has misled forum members. Your single Retained earnings account is the default one. It is assigned to the Equity group and is unrelated to any capital account.
It has no starting balance, and cannot in Manager. The starting balance of that account is calculated automatically by Manager to balance the accounting equation. This depends on correct starting balances for all other balance sheet accounts. It does need to match the closing balance from any prior accounting system. But the functionality serves as a verification. You do not enter a starting balance directly, but when it matches, you know all other starting balances are correct.
It also includes one account, Retained earnings within the Equity group. Retained earnings is an example of an automatically generated account. Every business needs this account. So while you can Edit it by renaming it or assigning it to another group, you cannot delete it.
I apologize to Tut for using the term ‘Retained Earnings’ incorrectly - since there are two accounts listed this way in my system I was trying to identify them so people could find them on my attachements.
Here’s the Edit screen for the RE account inside my Capital Accounts section.
If I were to (and if it would let me) just make the starting balance of this count 0.00, would it correct the official Retained Earnings account? I’m not sure, at this point that I want to (or even can) start from scratch and put back 4+ years of transactions into the system.
This is NOT a retained earnings account. It is an ordinary capital account. But instead of giving it the name of a stakeholder with a capital interest in your business, you named it Retained Earnings. Sounds like a boring person. The program allowed you to enter a starting balance because you can do so for ordinary capital accounts.
To restore sanity to your accounting records, you need to delete this account. If there was a capital account holder who had 46,848.42 invested in the business when you started using Manager, you should correct the starting balance of that person’s capital account.
But if, as I suspect, this was just the balance in your prior accounting system of its Retained earnings account, this account MUST be deleted. You should generate a balance sheet for the day you started using Manager, which should be the day after you stopped using your prior system. If the balance of Manager’s built-in Retained earnings account does not match the closing balance of retained earnings from your prior system after deletion of this account, you MUST figure out why, because your financial statements have been incorrect since you did this. You may have incorrectly entered unpaid invoices. Or you may have incorrectly entered starting balances in other capital accounts. Or you forgot to enter a loan balance. Whatever you did, by erroneously creating this ordinary capital account, you forced the program to balance the accounting equation by automatically adjusting the balance of the actualRetained earnings account. And that real Retained earnings account has been wrong ever since.
Based on what you have shared so far, this problem should not be difficult to unravel, because it appears you have not posted any other transactions to the erroneous account since it was created. You might have to revisit balance sheets you have created in the interim to make sure they adjusted correctly.
The advantage of Manager’s perpetual nature is that, if you make a mistake early but correct it later, the correction should ripple through automatically. As long as you have not taken in or paid out money related to the error, there should be nothing else to correct beyond printed reports. (Note, that isn’t a guarantee, because I don’t know what else you might have done.) Fortunately, in your jurisdiction, balance sheets are not implicated in tax returns.
