[GNC] what is best reconcile/update procedure?

Sat Jan 18 20:53:54 EST 2025

All — First, I want to apologize for the length of this rant.  We will always agree to disagree on this subject.  Please understand, I am a retired 30 year bank auditor.  I know the purpose of what a reconciliation is.  But what I don't understand is this obsession with doing monthly reconciliations for personal accounts on your computer.

First, I have not received a "paper" statement from my bank in over 20 years.  My statements are all online.  Second, I sign-in to my (checking and credit card) accounts almost daily.  So I know exactly when every deposit or charge hits my accounts.  Third, in this day and age, I write, maybe, one check a month, to my landscaper who does not have direct deport.  Other than that, my 20-30 transactions per month are all electronic.  Also, I charge almost everything on my charge card.  So any money I spend is on my charge card statement.

Fourth, I enter transactions in GnuCash whenever I feel I have a few spare moments and my GnuCash balances nearly always match my online account balances except for when my landscaper takes too long to cash his check, or an electronic transaction takes more than a day or two to clear. Fifth, the whole purpose of the reconciliation process is to identify transactions that you either know to be coming or that you think will be coming that have not been reflected on your current bank balance so you don't overdraw your account or so that an unauthorized charge does not slip by.

With that backdrop — as you can probably tell,  I have not done an old-fashioned monthly bank reconciliation in eons.  Technically, since I sign-in almost every day, I guess you can say I do a mini-reconciliation of my accounts daily (or almost daily!) and because of that, I know exactly what my balance is almost all the time.  Additionally, if I see any unknown transaction online (which is like never!), I can call my bank almost anytime and discuss with them what the transaction is and usually get it rectified rather quickly.  And the benefits of looking at my account everyday is that I can see it hit that day!

So, with all that being said, can someone please explain to me why people are wasting their time doing manual C/N reconciliations on a bunch of transactions on their computer?  I would think they could use their time much more effectively doing something else.  You see, the reason for reconciliations in the past were that you did not have the access, as you do today, to go and see exactly what the balance is or what transactions have cleared in your account, anytime, anywhere, 24-hours a day!

Reconciliations are vital for a business so they have documented proof of their transactions.  Also, they sometimes are required by government regulations or company policies.  So I get their need in the business world.  But reconciliations for your personal accounts are a thing of the past.  In this day and age, transactions clear pretty quickly.  The longest it takes for a transaction to clear is usually a manual check - and that's only dependent on how long it takes for someone to deposit it into their account.  Hell, I have had some transactions clear in as quick as 10 seconds (for internal transfers or internal payments to a bank CC).

Again — there will be many who will totally disagree with me, and that's OK, but I still don't see the reason for a monthly reconciliation process to true up your personal accounts.  Waiting until you get a statement in 30 days to see if your GNUCash balance matches the bank is crazy to me when I can see it and balance it every day!

In the end - I guess my 1 minute per day is probably someone else's 30 minutes at the end of the month or whenever they get their electronic statement.   But in today's electronic banking environment, why would someone wait 30 days to get a statement from the bank to  reconcile their personal accounts, when they can see the balance on their own, any day and anytime and balance it daily?  Seems counter-intuitive and counter-productive to me.  But I guess that's just my preference.

Ken

PS - by the way — this is also exactly why banks charge for paper monthly statements now.  They are required by law to give you a statement - but if you want it on paper - they are allowed to charge for that paper since it is available electronically all the time - everyday after they generate it.

________________________________
From: gnucash-user <gnucash-user-bounces+pyz01=outlook.com at gnucash.org> on behalf of Jim DeLaHunt <list+gnucash at jdlh.com>
Sent: Saturday, January 18, 2025 4:56 PM
To: gnucash-user at gnucash.org <gnucash-user at gnucash.org>
Subject: Re: [GNC] what is best reconcile/update procedure?

Arthur:

On 2025-01-18 13:06, arthur brogard via gnucash-user wrote:
> i just keep personal books for the family.
> my update and reconcile procedure works but is a bit tedious.  I can't think of any better way and I doubt there is one but i thought it might be good to ask.
> At sort of almost random times I decide to update the books.  So I download from CBA transactions from the bank accounts.
> then I put them in a spreadsheet.  in date order.
> then I inspect and compare with a transaction report from gnu cash - one for each account - and identify transactions not yet in gnu cash.
> delete all but those from the spreadsheet.
> sort on description.
> attach a fourth column for target account.
> import to gnu cash.
> that's the update
> balances should agree.  that's the reconcile.
> all that downloading, spreadsheeting, sorting blah, blah.....  any better way or that's just it?

Are you familiar with the Reconciliation feature of GnuCash?

It is described in sections 2.9.4. Reconciliation and 5.4. Reconciling
Your Accounts of the GnuCash Tutorial and Guide
<https://gnucash.org/viewdoc.phtml?rev=5&lang=C&doc=guide>, as well as
sections 4.5. Reconcile Window and 5.8. Reconciling an Account to a
Statement of the GnuCash Manual
<https://gnucash.org/viewdoc.phtml?rev=5&lang=C&doc=help>.

I won't repeat all of that here.

I collect receipts or emails for all transactions. Every week or so, I
go through them and enter all transactions. When the statement arrives,
it is usually in the form of a PDF file from my bank or credit card
company. I hope the statement in one window on my computer. I open
GnuCash, and the tab for that account, in another window. I push the
Reconcile button to start the process, and confirm that starting and
ending balances for the statement. The Reconcile Window appears. The
Reconcile Window has an entry for each unreconciled transaction in that
account. Next to each entry is an unchecked checkbox.

I hold a pencil or pointer next to each line of the statement, in the
one window, in turn. For each line of the statement, I find the
corresponding transaction in the Reconcile Window. I check the checkbox.
Sometimes I need to add or correct a transaction. For that, I go to the
account's register window, and make the change. The result appears
immediately in the Reconcile Window. Then I check the checkbox, and move
my pointer to the next line of the statement.

When I have gone through the statement, the Reconcile Window should have
an Difference value of zero in the bottom-right corner. I click the
Finish button. The Reconcile Window disappears. I close the window with
the statement PDF.

 From your description of downloading transactions, putting them in a
spreadsheet, and deleting from the spreadsheet, it sounds like you are
reproducing in a less convenient way what the Reconcile feature already
gives you.  Or maybe you are importing transactions — but that is not
reconciliation, that is data entry.

Does this help? Best regards,
       —Jim DeLaHunt

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