Account balance vs Reconciliation

Fund Accounting, Accounts Payable, Accounts Receivable, Payroll

Moderators: Moderators, Tech Support

Post Reply
GSA Candace
Posts: 12
Joined: Sun Dec 27, 2020 2:02 pm

Account balance vs Reconciliation

Post by GSA Candace »

We just started PC for accounting this January. I entered December bank statement ending balance and then all outstanding deposits and cheques in the set-up assistant. When all the funds and accounts were properly accounted for I entered all the January transactions. When I run the reconciliation I see December's outstanding transactions as well as all of January and can clear each item according to the January bank statement, leaving a few outstanding items from the end of January. My adjusted balance should then match the account 1110 balance but it does not. My January account activity report starts with December's bank balance, then adds and subtracts only January's transactions - which makes sense because it's January's report. But what happens to December's outstanding transactions? Did I miss a step somewhere? Because if I clear December's outstanding items in the reconciliation the adjusted balance doesn't match the account 1110 balance. :wall:

NeilZ
Posts: 10209
Joined: Wed Oct 08, 2003 1:20 am
Location: Dexter NM
Contact:

Re: Account balance vs Reconciliation

Post by NeilZ »

GSA Candace wrote:
Mon Mar 15, 2021 11:07 am
We just started PC for accounting this January. I entered December bank statement ending balance and then all outstanding deposits and cheques in the set-up assistant. When all the funds and accounts were properly accounted for I entered all the January transactions. When I run the reconciliation I see December's outstanding transactions as well as all of January and can clear each item according to the January bank statement, leaving a few outstanding items from the end of January. My adjusted balance should then match the account 1110 balance but it does not. My January account activity report starts with December's bank balance, then adds and subtracts only January's transactions - which makes sense because it's January's report. But what happens to December's outstanding transactions? Did I miss a step somewhere? Because if I clear December's outstanding items in the reconciliation the adjusted balance doesn't match the account 1110 balance. :wall:
Did you use the Bank Statement's December balance as the starting amount, or the check register's balance? They are two different things. The check register is the running total of your balance, minus any check's you have written whether or not they have cleared the bank.

This is what you should have started with as of Dec 31st, not the bank balance. The system assumes you entered the check register balance when it asks you for 'outstanding checks' that have not cleared as of Jan 1st. The system assumes that the 'outstanding' checks you've entered have already been accounted for in the starting balance since it was the 'check register' balance.
Neil Zampella

Using PC+ since 1999.

GSA Candace
Posts: 12
Joined: Sun Dec 27, 2020 2:02 pm

Re: Account balance vs Reconciliation

Post by GSA Candace »

Yes, that was my mistake. I misread the instructions and used the bank statement balance. Is there a way to correct it or do I need to restart accounting?

NeilZ
Posts: 10209
Joined: Wed Oct 08, 2003 1:20 am
Location: Dexter NM
Contact:

Re: Account balance vs Reconciliation

Post by NeilZ »

GSA Candace wrote:
Mon Mar 15, 2021 5:13 pm
Yes, that was my mistake. I misread the instructions and used the bank statement balance. Is there a way to correct it or do I need to restart accounting?
Trying to correct what was done now can be more trouble than its worth depending on how many transactions you need to input manually. Were you cutting checks from Accounts Payable in January? You'd have to add those as manual checks, along with any vendor information, and so on.

Then there's the deposits made in January, you'd have to manually add those and make sure you broke down the income into the correct income accounts.

Based on how many checks and deposits you'll have to input, not to mention how much you need to do to setup the COA properly again, will determine if a restart is the best way to go.

That said, if I had to do it, I would restart. Before I did that, I would make sure I have printed reports of Vendor information, the check register, and so on.

That said, restarting accounting does not affect any other module such as Contributions, although you would probably have to check the INCOME accounts that were setup in the Contribution Funds.
Neil Zampella

Using PC+ since 1999.

GSA Candace
Posts: 12
Joined: Sun Dec 27, 2020 2:02 pm

Re: Account balance vs Reconciliation

Post by GSA Candace »

Thanks!

thejourney
Posts: 5
Joined: Tue Dec 22, 2020 12:06 pm

Re: Account balance vs Reconciliation

Post by thejourney »

NeilZ - How do you view what you entered as the beginning balance? I believe I made a similar error. I can't reconcile my bank account for Jan. and I believe that is why. (still learning and have been trying to figure out the error before I did Feb) I have the latest version and I need to check what was entered for the beginning balance against the bank statement. If it is wrong - how can I rectify? Thank you!

NeilZ
Posts: 10209
Joined: Wed Oct 08, 2003 1:20 am
Location: Dexter NM
Contact:

Re: Account balance vs Reconciliation

Post by NeilZ »

thejourney wrote:
Fri Mar 19, 2021 3:52 pm
NeilZ - How do you view what you entered as the beginning balance? I believe I made a similar error. I can't reconcile my bank account for Jan. and I believe that is why. (still learning and have been trying to figure out the error before I did Feb) I have the latest version and I need to check what was entered for the beginning balance against the bank statement. If it is wrong - how can I rectify? Thank you!
The point is you don't use the beginning balance from the bank statement. You use it from the check register.

So if you started Accounting as of Jan 1st, the running total from the check register as of Dec 31, 2020 is what should be used.

To find out what you entered for the beginning checking account balance, run the Check Register report from the Fund Accounting Reports menu. The first line of the report will show the beginning balance, I'd have the date range as Year to Date.

If that beginning balance is equal to the bank balance as of Dec 31st, then there's your problem.
Neil Zampella

Using PC+ since 1999.

Post Reply