Starting Balance during Accounting Setup

[Preacherterry]

I used the 12/31/2013 statement balance as the starting balance when setting up a checking account in PowerChurch. The manual check register had never been subtracted or reconciled so this was the only balance I had available. I did go back and check-off all the cleared checks from the bank statements for the last 6 months and entered the outstanding checks during setup. Now I am trying to reconcile January and my balance is off by the exact amount of outstanding checks that I entered.

I'm thinking I should have entered my actual register balance as the starting balance instead of the bank statement balance. What kind of transaction do I need to correct my starting balance?

Thank you.

[JohnDMeyers]

You needed to either enter the bank statement balance and the outstanding checks and deposits
-or-
Your check register balance without the outstanding checks and deposits.

Apparently you entered the bank statement balance without the outstanding checks and deposits.

I would make one entry to correct this. The amount is equal to the net of your outstanding checks and deposits, call it $324.56. I will show it as a decrease. If it is an increase, simply switch the DB and CR.

CR 01-1110-000 $324.56
DB 01-3110-000 $324.56

I would date this 1/1/13 and call it "correct error in beginning balance".

[Zaina]

The basic idea with entering that outstanding balance in the accounting setup assistant is that you will have a paper checkbook or some other method where you are tracking the transactions. You enter that balance for the date you are setting up accounting. There are almost always checks and maybe deposits that are showing in your paper checkbook that the bank doesn't know about (they haven't cleared yet).

Example, you have a balance in your paper register of $900. But you wrote a check late in the month of $100. So you enter the $900 as a beginning balance and in the outstanding checks/deposits you enter the $100 check. A few days later, it clears the bank. When you reconcile, that $100 is showing there to clear when you do your first reconcile. But it doesn't affect your balance because the program assumes it has already been included (subtracted) in your beginning balance.

If you don't have a paper checkbook or you are unsure what your real balance or outstanding items should be, you can enter the balance on your last bank statement but you do not enter outstanding transactions. That balance will be $1000 because the bank has no clue about that last $100 check yet. You would need to enter that check as a manual transaction after the setup and before you do your reconcile because it cleared the bank that month and does need to affect your balance.

Hopefully this helps.

[Preacherterry]

I entered the bank statement balance AND the outstanding checks from 2012 so it is the opposite of previous reply above.

I have checked off all of my checks and deposits that cleared in January and the totals are correct, but it says To Balance: $4909.58. This is the exact total of all the outstanding checks that I entered during setup from 2012.

I'm thinking I would enter a manual transaction that looks like a CHECK for the total amount dated 1-1-2013 because my starting balance was actually lower than what was shown on the bank statement...

Checking account is 1130 DEBIT?
Expense account is 3110 Unrestricted net assets - CREDIT?

I just don't want to do it wrong and have another reversal in there confusing things...

[JohnDMeyers]

Before you do that, did you clear all of the outstanding checks and deposits, or are they still outstanding?

[Preacherterry]

I am in the middle of a reconcile and have them selected but then clicked Postpone so it is still in process.

[JohnDMeyers]

Hmmm.

Clearing them should work. But you are saying it does not.

If you bank statement balance is higher than your PowerChurch balance, which is what I understood you to say, then you want to do this:
DB 01-1110-000 checking $4909.58
CR 01-3110-000 unrestricted net assets $4909.58

I guess that's what you said, as well.

If you do it the wrong way, just REVERSE the transaction and try again.

[Zaina]

I entered the bank statement balance AND the outstanding checks from 2012 so it is the opposite of previous reply above.

I have checked off all of my checks and deposits that cleared in January and the totals are correct, but it says To Balance: $4909.58. This is the exact total of all the outstanding checks that I entered during setup from 2012.

I'm thinking I would enter a manual transaction that looks like a CHECK for the total amount dated 1-1-2013 because my starting balance was actually lower than what was shown on the bank statement...

Checking account is 1130 DEBIT?
Expense account is 3110 Unrestricted net assets - CREDIT?

I just don't want to do it wrong and have another reversal in there confusing things...

I would make a backup under the utilities menu. But if you credit 1130 and debit 3110, post that transaction and clear that transaction, it should balance to zero.

[Preacherterry]

Ok, it was the opposite but I did the reversal and entered it back in the opposite of the previous message and that allowed me to balance this starting month. I will just make some notes on the report of what happened. Thank you so much for your help. I think we are finally up and running!