ORPHAN vs. IMBALANCE

[Mike or Penny Novack]

I have an account called "Errors and Exceptions."

> There are situations where a bookkeeper might not be sure where (for 
> example) to post an expense, and needs somewhere to “park” it so as 
> not to interrupt data entry. Once the right expense account has been 
> identified, the Orphan or Imbalance can be corrected at leisure. In 
> paper-and-pencil days a Suspense account was used to make sure the 
> books balanced in such circumstances (or more usually because a 
> transcription error stopped the books from balancing), and this is 
> essentially what the Orphan and Imbalance features are providing. I’m 
> content with the status quo, but would accept a warning about a 
> posting to Orphan or Imbalance with the opportunity of going back to 
> fix the offending transaction. Michael

OK, different things here, and all of them might be useful.

1) "Imbalance" and/or "Orphan" ---- Sometimes, in the middle of entering 
a transaction, you realize that you need an account that does not yet 
exist in the chart of accounts. What do you want to happen? Have to 
abort the transaction , create the account(s), and reenter the 
transaction? Or would you prefer to complete the transaction (using 
"Imbalance" or "Orphan"), create the account(s), and then fix the 
transaction> Keep in mind that some research might be needed or 
consultation with your accountant.

2) "Over and Short" --- no, this is something else. In a retail business 
where cash is involved the register tape might not match what is in the 
register drawer. Even after counting and recounting, no match. So for 
that day the transaction recording "sales" will be a split with 
"undeposited cash" and "over and short".

3)" Suspense" --- Not just in the days of pen and ink on paper but even 
today. It might be the policy of the business (was where I worked) that 
all incoming checks were immediately deposited no matter what. No matter 
hadn't a clue what the check was for (no supporting paperwork enclosed), 
check in wrong amount (say too much), check for multiple things not all 
the paperwork included, etc.

So recorded in "suspense" and it would be somebody's job to monitor 
suspense and get these corrected to where they should go, make refunds, 
etc. You need to understand that sometimes could be complicated and time 
consuming. Just like those of you who have "receivables" and "payables" 
might be running "aging"and other management reports the "suspense" 
account would have management reports (how well are the people hose job 
it is to resolve these mysteries doing)

In other words, Imbalance/Orphan is for can't put where it goes now (and 
maybe unsure exactly  should be) but the transaction is understood. 
"Over and Short" is a proper account just like "bad debt" is. "Suspense" 
is for immediately recording money in (not losing a check behind 
somebody's drawer) even though the transaction will need research to be 
entered.

Michael