Here’s a question about reconciliation and running reports in Quicken from a reader:
I have quicken and would like to use it to run reports (net worth, where I’m spending, etc.). But it seems to be forcing me to do “reconciliation” which from what little I understand is to make sure there aren’t mistakes that the banks are making etc. I’ve connected to my accounts online, but the totals for those accounts in Quicken don’t match what they should be.
I usually just review my bank statements to check for mistakes, and reconciliation seems like way to much work. Can Quicken be used in the way I’m thinking, or am I way off base?
Before you run any reports, you should do what you can to make sure all the data are accurate, and that’s what reconciliation is for. The software doesn’t force you to reconcile, but you my have set up Quicken at some point to automatically reconcile each time you download your activity from your bank. If that’s the case, you can turn that off by performing a manual reconciliation of each account and turn off the option for automatic reconciliation.
Click the image thumbnail to the left to see where this option is in Quicken 2007 Home & Business.
Perhaps this is because part of my day-job responsibilities involve working with bank-to-ledger reconciliations for a company with thousands of bank accounts, but ensuring the validity of your data is important before running any net worth or spending reports. Reconciliation catches mistakes on the bank’s side (improper fees, incorrect amounts, extra or missing transactions) and well as mistakes on your own side.
Whether or not you choose to reconcile, Quicken can be used to run all kinds of reports, but the reports will only be as accurate as the information in the software. In the menu bar, under Reports, select “Reports & Graphs Center” to see all the different types of reports you can run. The standard reports are displayed on the left of the resulting window, and any custom reports you have saved are on the right. Click on the image thumbnail for an example from my personal Quicken file.
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{ 6 comments… read them below or add one }
Reconciliation shouldn’t be too hard, but auto matching transactions doesn’t work that well, neither does manual matching. Sometimes I just have delete the downloaded transaction and go straight to the recon screen. Typical example is that I get three checks, I like to make one entry for each check vs a split transaction, but the bank gives me one total deposit item. The account will still balance.
If your accounts AREN’T balancing, it’s a problem and you should track that down. Perhaps it’s fraud. Perhaps you bought something you don’t remember, or your joint account holder is trying to hide something from you.
Question back to the reader: Why don’t the balances match?
If you know, then you can put in an adjusting entry to reconcile them. If you don’t know, find out.
There are two ways to reconcile in Quicken…either reconciling to your hard copy statement, or to the balance reported when you down load.
THE DOWNLOAD BALANCE WILL NEVER THE SAME AS THE BALANCE SHOWN ON YOUR STATEMENT. This is due to the fact that the download balance is as of the day of the download, and is not the same as the closing date of your statement.
Also, bear in mind that you can’t go back and forth between statement reconciliations and download reconciliations. Once you’ve reconciled to the download balance, you can’t go back to statement reconciliations. So choose one method and stick to it.
I’m actually scared of quicken now, and I’ve switched to KMyMoney. It’s a lot simpler, and it doesn’t force me to upgrade when I don’t want to. I don’t think that business users will find it very useful, but for my home use it’s great.
I’m a student trying to use this to figure out my expenses. Now you mentioned that when you download your account information, the balances will never be the same. My question is, would it eventually “catch-up” and be the same after you download multiple times? Is there a way to have the same balances?
Vishal,
Reconciling ‘never being the same’ refers to switching back and forth between online and paper statements. It is actually possible to have it be the same, if you practice some earnestness and delete your duplicated transactions. There are days when even online reconciliation is off for me because I forgot this-and-that-transaction-of-87-cents. Have no fear, it will work if you pay attention to what you are doing.