Workflow with check

I would like to know what is the workflow when you receive a payment by check. What i do is that i enter the transaction and put it as “pending”.

But then when i upload the bank statement there’s no way to match or merge those transactions. I find it a bit of a problem especially when you have multiple check deposited at the same time…You have to erase one of the 2 transactions…But still i want to keep track of the check numbers…

Any ideas how to do it?

You either enter bank transactions manually or you import the statement. You do not do both or you will be doubling up on every entry.

I know that. But the workflow in other softwares is when you receive a check you enter it and it goes into undeposited funds. When you upload the bank statement later you can merge the transaction in the bank statement with the checks that you select.

Why would you want to enter the transaction twice? If you like the way other software works, you should use other software.

Why do you always have to answer like that…If you don’t like to discuss about the software and ways to improve it then why are you on the forum…

It is not a question of entering a transaction twice. It is to keep track of the checks as soon as you receive them. When you receive the checks you enter them in the system but it is not yet a transaction.

How would you do that process?

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Because I am one of the moderators.

Yes, it is. Entering a check manually is once. Importing a bank statement is twice. If you do either, there is no point in doing the other, as you will need to delete one of them.

The program includes a feature specifically for that purpose. Read the Guide:

To Manager, everything you enter is a transaction. The difference here is whether the transaction entered in Manager has cleared your bank yet. That is what the Pending/Cleared status takes care of.

The option of importing bank statements eliminates the need to use that feature, because every transaction reported on your bank statement is, by definition, already cleared.

The way Manager works is that you use payments and receipts to manually enter transactions or you use bank imports. You can’t do both! If you are using invoices (purchase and sales), then simply create the invoice and at the end of the day/week/month (depending on how many transactions your business does) - then do a bank import and all your payments and receipts will be entered for you.

There is no need to enter payments and receipts manually. It is time consuming, error prone for reconciliation and I would consider this to be the old fashioned way of doing things. I used to do it manually, but when I moved to bank imports - it has saved me so much time and it makes it easy for me to see when I have forgotten to put an invoice on the system.

Use Bank Imports and Bank Rules and don’t bother about manually entering payments and receipts.
However I am not sure what the procedure is when you are using cash transactions as I only work with invoices and bank transactions. I do not receive any cash.

Thanks for your reply. I know how it works with bank statements because i use it since a couple if years.

I just wanted to know if there’s a feature that keeps track of the check until they are deposited. I know that some software ( i will probably be bullied because i mention other software) use a feature where you enter your check but they are not posted in the books. Then when you upload the transactions from the bank you can merge the checks you want with the deposit that matches…

The answer is agressively no…that’s it.

I think @Jici has a valid point here. I have discussed multiple times that many people might need to issue receipts and payments on the spot for cash and cheques but they still have many many other transactions like transfers which are not entered manually. Why do you have to force the user to benefit from “either this or that” when in fact you can benefit from both? I can’t understand your logic here.

The poi, when you have standing instructions or cheques, manager forces you to either match the bank figures (which can get you in serious trouble when you issue cheques since you don’t keep track of your book balance) or alternatively, waste the majority of your life enetering things manually (the old school way).

A possible solution is to import bank statements as their own thing (not as receipts and payments) and then match the entries of bank statements to receipts and payments (preferably merge inter accounts transfers or preferably drop inter accounts transfer entirely in favor of a single receipts and payments tab.) using a proper matching table. It would also help if Manager supported a separate bank reference field natively which it can use to detect any matches between the bank statements and receipts and payments to avoid duplication.

Manager has many advantages that makes it superior to other software, but not always, mainly due to the lacking matching and reconciliation capabilities (save for invoices>receipts and Dr/Cr notes>invoices). The current cross referencing is insufficient in many cases.

My friend @d3mad has made posts in a similar spirit.

I know I took a different position with d3mad’s post but I am wiser now and I can understand his situation much better :sweat:

Personally I like to implement manager on all my clients but I am not able to mostly due to the lacking matching. I am forced to use manager in combination with other software. It would be really nice if someday I can get all my clients onto manager.

Understand my role. As a forum moderator, I have no more influence on program development than you do. I cannot force anyone to do anything. I try to help users understand what the program will and will not do. Sometimes I furnish ideas, which they are free to ignore, that might help them accomplish things they want. That is what I was asked to do as a moderator. I find it quite rewarding, despite criticism from you and others.

This is the same suggestion @Jici made, which involves entering things twice, once manually and once by importing. Maybe someone can explain to me how this would be advantageous so I can explain it to others.

You overlook the fact that a bank statement import cannot generate an inter account transfer, because it contains only half the transaction.

Yet you are proposing to do both: enter the transaction manually (because if you don’t, you will have nothing to match the import against) and then import. But, if you are willing to enter the transaction manually—as your suggestion requires—Manager already has the means to tell you both cleared and actual bank balances. Your proposed solution requires you to import the statement when you would have already entered all transactions. It would then apparently automatically match those already present and delete one or the other. You can accomplish the same thing by simply looking at your bank statement to verify your manual entries were correct. The only way your suggestion provides any saving of work is if you are willing to trust the software to delete things for you without review. That could be a very dangerous approach.

I fully understand your situation to that and I know first hand how difficult it is to deal with people’s wants which are all over the place.

But on the other hand, I think @Jici has a good point and think it should be heard regardless of whether their suggestion will eventually be implemented.

Reconciliation is basically the matching and comparison of two sets of records. Importing bank statements leaves you with one set of records, so the reconciliation report in manager is just the end result without documented matching. Any mistake here and the entire process must be reworked from scratch, which is not good. To enternalize the full reconciliation procedure into manager you need to have two sets of records and a matching table to join them both. This is why you should import bank statements as its own thing. Any error in matching can be undone and any subsequent changes would not break the reconciliation (as long as you are able to undo and edit matches)

You can merge the two and have three options in the dropdown list already in receipts and payments:

  • Receipt
  • Payment
  • Internal transfer

Instead of having one bank account field for receipts and payments, why not have two: a) receiving account, b) drawing account.

For receipts use (a), for payments use (b) and for internal transfers use both.

I am already doing both, as follows:

  1. Entering transactions manually in manager

  2. Match what is entered to the bank statements.

  3. Import whatever items not matched in the bank statement.

  4. Maybe delete some items from manager that are not that are not matched to the bank statements.

Not at all dangerous. Manager would not do any deletion. In fact, no AI or fancy procedures are requored. Manager should only give the user the ability to:

  1. Enter bank reference for transactions already entered in receipts and payments. This will enable manager to identify matches between books and bank statements.

  2. Import full bank statements and identify unmatched transactions.

  3. The user will go through the import procedure normally but this time on the shortened list of unmatched transactions only.

  4. Manager would assign matching references to both receipts and payments as well as bank transaction entries that were matched in steps 2 and 3.

  5. It’s up to the user to decide whether any of the receipts and payments without a bank matching reference are to be deleted.

For that one more native fields maybe required which is bank reference.

Also the clearing date field should remain to be updated whenever the matching table is updated. The clearing date will be automatic and will be used for the reconciliation report.

I am in agreement with @Ealfardan and @Jici as per the point that they are trying to make. However, I don’t agree with the proposed solution as this would effectively require people to manually enter all the information and do a bank import.

I like the fact that the bank import removes the need to manually enter all the transactions into payments and receipts.

I believe that the correct solution is to retain the bank import populating the payments and receipts section, whilst adding some kind of functionality to enable people to keep track of cheques where you need to record cheque numbers etc. Not just cheques but other data entry as well.

I would not replace the current system with one where bank imports and payments and receipts are separate things as bank imports works really well to eliminate the need to manually enter most data. The solution should be to enable bank imports and manually entered information such as cheques to merge.

Not if you issue cheques. For example, you only do bank imports and you have issued a cheque of 15k but didn’t record because the payee forgot to deposit it on time. Your book balances exactly matches the bank (since you never record things manually) and you think you have 20k (as the statement says) so you make a payment of 10k. Now you only have 10k.

The guy who slept on the 15k cheque suddenly remembers and tries to deposit the cheque but it bounces due to insufficient funds.

Had the cheque been recorded manually, manager would have only shown 5k instead of 20k and you would have not made the 10k payment and avoided trouble with the bank.

This is why your accounting software should always reflect your book balance as well as your bank balance and for that you need some manual entries.

This is exactly what i am trying to explain. I don’t want to do the same thing twice. I don’t want to use Receiver and payments to enter check.

Let’s take for example that you have received 20 check from customer but you make only one deposit. For the moment you have 2 choices.

1- you enter the 20 checks with receive and spend money

2- you take the amont from the bank statements. But then you don’t know which Bills are paid . I f you try to split the transactions on many lines, even if you indicate the customer and the invoice number the system does not automatically fetch the amount so you need to Search the system to see what amount goes to which customer…

That’s why it would be great to be able to pre enter the checks with customer and invoice number and when you import the bank statements IT becomes easier to split the big deposit into all the customers involved

I would suggest that what is required is an inbuilt specialized clearing account. This clearing account is often called “undeposited funds” by other accounting software providers. This way you are able to enter cash and cheque receipts (e.g. daily takings) as they happen and the bank import can still be performed with the periodic bank deposits allocated to the “undeposited funds” clearing account.

I try to understand what is going on here and noticed that the problem is that you can not simultanously enter transactions manually and via bank statement imports. However, when using Sales and Purchase Invoices you actually do this, or am I missing something? As such if you issued a cheque that is not yet clear by a bank it could have been part of a Purchase Invoice until cleared by the bank so not sure why you have to enter cheque number, alternatively you make the cheque number part of the Invoice. Obviously when you receive a cheque and did not clear it this could be part of a Sales Invoice. If using PI and SI you should be able to prevent spending funds that you have not in your bank account as you need to keep watching your balances. I agree with the underlying philosophy that one needs to take advantage of being able to do things in a new way. As we are able to get electronic bank statements all payments and receipts can automatically be registered and assigned which is great and makes bank reconciliations a breeze. Good use of sales and purchase invoices which can add much more details to a payment or receipt, including cheque numbers can be applied where needed and indeed constitute a double entry. However, the advise to improve the bank imports to split receipts and payments makes a lot of sense. We spend a lot of time converting our bank statements to merge the payment and receipts columns before importing. Also it would be much easier to avoid mistakes to what belongs where. The problem is that this may be too complicated for programmers to implement with legacy data as they are now blended.

You don’t have the choice to use sale and purchase invoices unless you’re doing cash accounting. The problem here is when you have to apply a payment or receive money for those invoices.

I don’t understand why you have to convert your bank statements. You cannot download them in QFX format from your bank?

Actually, you can. But then you have duplicate entries and your accounting will be incorrect unless you delete one or the other of each duplicate transaction.

You are missing the fact that invoices only create receivables or payables. They do not record movement of money into or out of bank accounts.

This would not be practical, because it could prevent you from recording transactions that actually occur. For example, if you have automatic overdraft protection on your bank account that allows you to write cheques with insufficient balance, your suggestion would prevent you from using it.

Invoices are completely separate from receipts and payments.

This is entirely the result of your bank’s formatting, possibly its failure to adhere to a published standard or use of a format without a standard.

I am not sure exactly what this statement refers to, but it is not correct. You can use sales or purchase invoices:

  • Under accrual or cash basis accounting.
  • Whether they will eventually result in a receipt into or payment from bank or cash accounts.
  • For non-credit sales and purchases if you want to associate transactions with specific customers or suppliers. You just need the extra step of also entering a receipt or payment.

I meant that you have to use sale and purchase invoices if you do accrual accounting.