In financial terms, reconcilemeans to compare one set of records to another for the sake of accuracy. In other words, reconciling means to make sure that your records agree with the bank’s records. When you reconcile an account in Money, you compare the transactions on the statement that the bank or brokerage house sent you to the transactions that you entered in the Money register.
If you find a discrepancy between your records and the bank’s, you can be pretty sure that the
error was made on your side. Not that it doesn’t happen, but banks don’t err very often when recording financial transactions. Yes, bank lines move too slowly, and banks have been known to nickel-and-dime their customers with all kinds of petty charges, but banks are sticklers for accuracy. If you find a discrepancy between your records and the bank’s, chances are the error was made on your side, not the bank’s.
bank statement:
•Statement date:Enter the date listed on the bank statement.
•Starting balance: If this number is incorrect, enter the starting bal-ance from your bank statement. If you reconciled this account last month, the correct number is already listed.
•Ending balance:Enter the closing balance from the bank statement.
3. At the bottom of the Balance dialog box, enter any service charges or interest income that is listed on your bank statement:
•Service charge:If you have to pay a service charge, enter it in this text box. Banks are like mosquitoes: They like to bite. Banks do it by charging customers all sorts of miscellaneous fees. The fees appear on bank statements. You may get charged for ordering checks, calling for information, using an ATM, or sneezing too loudly. Scour the statement for evidence of service charges, and enter the sum of those charges in the Service Charge text box. For a category, choose Bank Charges: Service Charge or something similar. (For more on categorizing, turn to Chapter 5.)
•Interest earned:If the account earned any interest, enter the amount and categorize the interest payment.
Before you click the Next button to move ahead, compare what you entered in this dialog box to what is on your bank statement one last time. Entering numbers incorrectly in this dialog box is one of the pri-mary reasons that people have trouble reconciling their bank accounts.
4. Click the Next button to move ahead to the Balance Account window, as shown in Figure 6-3.
Click here when a transaction also appears on the bank statement.
Figure 6-3:
Only transactions in the register that have not been reconciled appear in the window. Deposits and other transactions that brought money into the account appear at the top of the window; following that are with-drawals and other transactions that record when money was taken out of the account.
If you entered a service charge and/or interest payment in the Balance dialog box (in Step 3), the amounts already appear in the window, along with a check mark to show that they have been cleared.
Many people think that reconciling accounts is easier when transactions are shown on one line rather than two. To show transactions on one line, open the View menu and choose Top Line Only.
5. Examine your bank statement and click the C column next to each transaction on the statement that also appears in the register.
The left side of the window lists the difference between the ending bal-ance on your bank statement (you listed it in the previous dialog box) and the amount as tabulated by Money. When you click the C column in the register to clear transactions, this amount changes. Gradually, as the account is reconciled, the number approaches 0.00.
To remove a check mark in the C column, click the column again. The next section in this chapter explains how you can fix mistakes in the reg-ister while you reconcile. The section after that offers strategies for rec-ognizing and fixing reconciliation problems.
If you have trouble finding a transaction in the register, open the View menu and choose Sort By➪Sort by Date or Sort➪Sort by Number. The Sort by Date command lists transactions in date order, and the Sort by Number command lists them in numerical order in the Num column.
6. Click the Next button when the difference amount is 0.00 and you are satisfied that the account is reconciled correctly.
You can find the Next button in the lower-left corner of the window. A Balanced! screen appears and tells you that your account is balanced.
7. Click the Finish button.
Back in the register, all those check marks in the Balance Account window turn to Rs in the register. The transactions that you clicked off in the Balance Account window have cleared the bank and are recon-ciled with your records.
If the reconciling business makes you tired or if you find something better to do, click the Postpone button. Later, you can pick up where you left off by clicking the Balance This Account button in the Account window.