Thank you for sending that! We’ll take a look, and get back to you shortly.
Are you okay if we include specific numbers from that reconcile in our response here?
Thank you. And yes.
We’re still looking at this internally, and reviewing with our internal accounting experts.
While that happens, I’m wondering if you can go over the math you would expect to work out to the
< $100 difference you’re expecting.
The way we’re getting to the difference as you see it now is as follows:
- Cleared Balance: (-45570.70) + [ 62321.35 + (-45618.32) ] = (-28867.67)
- Difference: (-62328.79) - (-28867.67) = (-33461.12)
As you can see, the math based on the displayed values is correct. And it’s worth noting that, in our testing, if you invert the sign of your beginning and ending balances then things change drastically, and you end up with a difference of $55.06. However, if you’re using negative values, how would you expect that calculation to be happening to arrive at your < $100 proposed difference?
I didn’t do any math to get to the proposed difference. I just know that there is one credit card entry I haven’t entered. I pulled out the statement to check the amount of that charge and it is in fact $55.06.
The beginning balance is -$45,570.70 and there is a payment for $45,570.70 so that essentially cancels that out. The ending balance is -$-62,328.79 and I entered a total of $62,321.35 in charges. That would make a difference of -7.44. Then there is a credit for $47.62 under the payment side. Those two added together make a difference of $55.06.
After some extensive review, including consulting with our most experienced and knowledgeable accounting professionals, we’ve concluded that the way we are calculating the Cleared Balance and Difference is correct.
A little bit of backstory here, you are correct that about a month ago we made some improvements to the account reconcile page to better deal with reconciling liability/credit accounts. Previously we didn’t differentiate between cash and liability/credit accounts on the reconcile, which I believe may have led to some users adopting bad processes to fill the gap there.
As it relates to this situation, one of those bad practices may have been entering balances as negative values for those account types. To be clear, the beginning and ending balances should be (with very few exceptions) entered as positive values. If you remove the negative symbols from those values on the reconcile, it should display the correct cleared balance and difference for you, and of course be sure to click update afterwards to save that change.
For verification purposes, the change from negative to positive values here would result in:
- Cleared Balance: 45570.70 + ( 62321.35 + (-45618.32) ) = $62,273.73
- Difference: 62328.79 - 62,273.73 = $55.06
We do have a few changes that we will be implementing in order to help mitigate any confusion here moving forward. Notably, we will be adding an alert for to confirm when creating a new reconcile if the ending balance is entered as a negative value. We will also be clarifying to hovertip on the Cleared Balance to make it more clear how we arrive at the value displayed.
Hopefully correcting the balance symbols gives you what you need to move forward. Please do let us know if you have any additional questions about this!
Thank you for letting me know. For clarification on our side, for all of the credit card accounts it would not allow us to save them any other way. As a matter of fact, when we first started using CETEC we had to pay for a call with Arlene to discuss it because the negative numbers didn’t make sense and that wasn’t how we did it in our other system. Furthermore, if we entered them as positive numbers it would save them as negative numbers regardless. It would also make the reconcile incorrect if they were positive instead of negative. There was absolutely no way for them to be positive. So, there were no bad practices adopted and we even fought against it in the beginning. Now that you have made changes, we have 4 years worth of credit card reconciles that were previously balanced that now are not. Is there an easy way to fix that? Do I have to go through every single one and change them to positive numbers? Does it even matter or affect anything if they’re already closed?
Thanks for that information @kali. I certainly wasn’t trying to assign blame for the use of the negative numbers, I just wanted to acknowledge that there was a change, as a result of that change we believe we are now handling credit/liability account reconciles better than we were before, and that there was some necessary adjustment to process that needed to happen moving forward.
I will preface this next part to say: You should absolutely talk to your accounting personnel when deciding how you want to proceed, we can provide information and suggestions but anything said here on the forums should not be taken as expert accounting advice. That said, I would think that there would be no need to revisit previously closed periods, and you should be able to focus your efforts on cleaning up the reconciles in your current financial period. An important thing to understand when making that decision is the Cleared Balance and Difference are not stored values, everywhere you see them on the reconcile they are always calculated based on the formulas. So that means that, yes, if you open a previous reconcile that was using those negative balance values it will likely show different Cleared and Difference amounts than it did previously. But it is up to you whether or not there is a compelling enough reason to go back through all of the previous reconciles and make the change to the Beginning and Ending Balance symbols.
If you do decide you want to update them, then depending on the total number that need changed it is likely something our engineering team could write a script for. While there is no hard and fast rule in place, if there are more that 100 or so that need updating then it might be worth getting a quote from our engineers to see about writing that script. However, some quick napkin math here: you said you have 4 years of reconciles, typically this is a monthly process, so I would guess there would be around 48.
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