Reconcile issue

[Derek Atkins]

Hi,

Russell Mercer <rmercer206 at gmail.com> writes:

> Hi,
>
> I have a bank account that I am trying to reconcile that I am having a
> serious issue with.  Here is the situation and steps I have gone
> through so far.
>
> 1.  Reconciled the account from opening to Oct. 2008.  Finished
> reconcile correctly.
> 2.  Reconciled individually, months from Oct. to December 2008.
> Finished these reconcile operations correctly.
> 3.  Began to reconcile December 2008, found that I was off $366.
> Looked in account register, and saw that this amount was previously
> reconciled, so it did not show up in the reconcile window.
> 4.  Postponed reconcile.
> 5.  Entered register window and unreconciled this transaction.

BAD BAD BAD BAD BAD!!  You should NEVER unreconcile a transaction.
* slaps your wrists really really hard *

> 6.  Enter reconcile of this account again, for Dec. 2008.  Upon
> matching all credits and debits to the account, including the
> transaction that was previously not being shown, the balance is still
> off by $366.  Basically, it is indicating that I need an additional
> deposit of $366 to balance out the reconcile.

Right..  It's off my $366 because YOU ARE MISSING A TRANSACTION
(or you mis-entered the starting balance).

> 7.  In order to see if I could clear this out, I unmarked all
> transactions for Dec, and Nov. to try to work back from the October
> balance that had been successfully reconciled.  This should put the
> balance at the total prior to this $366 being included.  When
> Completing a reconcile for November 2008, the balance is now off by
> $366.
> 8.  I have come to the conclusion that the Opening balance, which is
> supposed to be a running total of all amounts that have been
> reconciled in the account, is VERY EASILY CORRUPTED.  In addition,
> there is no way to modify this, and so I am now stuck with potentially
> having to add in a dummy transaction to balance this out.  Of course,
> this means that my account balance in GnuCash, would not match the
> true Bank Balance.  Besides which, I HATE to have to hack a program to
> get it to seem accurate, because that is not really accurate.

Your conclusion is incorrect.  The opening balance is NOT supposed to be
a running balance!  It's an OPENING balance.  It is the effective
balance of your account at the beginning of your accounting.  I say
"effective" balance because it may not be the actual balance.  For
example, let's say you started accounting on Jan 1, 2010.  On 1/1/10
your bank account balance was $1000.  However on Dec 29th you wrote a
check for $245, and that check has not yet cleared.  You need to keep
that in mind when you enter the transactions.  In particular you might
want to include the uncleared transactions in your account so you don't
make these kinds of mistakes.

> I need help to figure out some way to roll the Opening Balance total
> back to what it is supposed to be, thus, to Subtract $366 from the
> Opening Balance.

Why are you modifying the starting balance at all??  You need to:

1) Look up the actual balance at the start date
2) determine all outstanding transactions that have not yet cleared as
of the start date
3) enter all those outstanding transactions and set the opening balance
accordingly so when it all clears it's "correct".

Generally all this requires is taking the balance according to the bank,
using that as-is, and then also adding in any outstanding transactions
that haven't cleared.

If you took the opening balance from the bank at your start date then
there's NO CHANCE for it to ever be off!

> Some thoughts on improvements to the Reconcile process.
> 1.  First of all, please let us modify the beginning balance of the
> reconcile process.  I should not be trapped because something
> corrupted the beginning balance value in my file.  When you start the
> reconcile, the beginning balance should default to the ending balance
> of the last completed reconcile, but that should be all.  Not being
> able to modify it means that I don't know exactly how it is being
> calculated, or if it is working correctly.

That would be incorrect.  You cannot modify the beginning balance.  That
would completely violate reconciliation and be a violation of GAAP!  The
whole point is to show you that you have a mistake, which it did.  The
fact that you can properly reconcile March without having a properly
reconciled February just makes the problem worse.

Once you notice you have a problem you need to go back and figure out
what changed, and why.

Note that you should never be changing reconciled transactions, and
generally GnuCash prevents you from doing so...  Although you can force
it to do so.

> 2.  It would be useful to show all transactions in the reconcile
> window, up to your ending date, whether they have been previously
> reconciled or not.  This would allow you to see something as in the
> above situation where there was a transaction that was marked as
> reconciled, that I was not aware of, but it ended up causing problems
> with all of my numbers.

This is arguable.  While it is possible to reconcile something in the
future, that should pretty much NEVER happen.  Why did you enter a
transaction with a date in March if it cleared your bank and showed up
in February?

Moreover, once you have years and years of data, having ALL transactions
in the reconcile window would be overkill!

> 3.  Do not pre-check all transactions within date range of reconcile
> process.  This may be different for others, but I go through my
> statement and check off each transaction as I match it on the
> register.  This means that I have to uncheck all transactions first.

Transactions are only pre-checked if you mark them cleared.  If you
don't want them pre-checked, then don't clear them in the register.

> Any help on the above situation would be very much appreciated.
>
> Thanks,
> Russell

> Please remember to CC this list on all your replies.
> You can do this by using Reply-To-List or Reply-All.

-derek

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord at MIT.EDU                        PGP key available