Q Mac: Loan/debt type accounts cannot be reconciled (+1 Merged Vote)

Quicken Community

Loan type accounts cannot be reconciled and need this functionality.  I was previously able to reconcile my mortgage against my statement, which is why I now have a mix of R's (green checkmark) and C's (cleared blue checkmark) in the transaction record. Would like the ability to reconcile my mortgage again. Please correct this and add this functionality.

Lysander Spooner

I agree, why is this function not available for this type of account?

julio.bouza

Removing this functionality has to be one the 1.34343 million changes that Quicken has done which makes the user wonder what they heck they are doing.  The work around is to change to Liability but then the user loses the graph and the information of the graph which I find valuable.  What a dumb change.

Mark Rasmussen

Please add the ability to reconcile a debt account, like a loan. I have two car loans and a mortgage that are correctly in my debt account. And they cannot be reconciled - apparently - against either my online account or the statement. The option simply does not exist. Crazy, since they are connected to my bank, and I make payments to them monthly, and I get statements from my bank each month detailing my account.

jacobs

For what it's worth, standard Debt accounts can be reconciled. Loan accounts cannot be. (I don't know why.)

Chris_QPW

jacobs said:

For what it's worth, standard Debt accounts can be reconciled. Loan accounts cannot be. (I don't know why.)

I believe the reasoning comes from Quicken Windows so I will explain what believe it is based on.  

Originally Quicken didn’t download transactions for loan accounts even though with the with loan wizard this amounted to downloading just one amount a month, one that the loan wizard already put in I might add, people requested to be able to download it.

When the request to download loans was put in I think everybody believed that they would be able to use the loan wizards and it will download just the net amount like you see on other account transaction downloads, and match it.  

But they had another problem that financial institutions were coming up with all kinds of different kinds of loan schedules that the loan wizard couldn’t handle. So to kill two birds with one stone what they decided on was that they would download all the information from the financial institution instead of just a net amount.

Because of the second requirement of unusual loan schedules they decided to adopt the idea of “get everything from the financial institution and believe whatever is sent”.

Now with that idea the realized that if the user edited the register and mucked it up they wouldn’t have any way to fix it.  And using the believe that the user must be “protected” they decided to hide the register.

So you have a choice a manual entry loan register like it was before they put in the feature or a downloading loan register where you can’t change anything.

Bob Tinsman

I used Quicken a really, really (I can't remember how) long time ago, and I could've sworn that loan payments could get reconciled, because the loan was just treated as an another account, and the transactions got matched up, so the current handling of online loan accounts seems brain-dead. What category am I supposed to use? How do other folks deal with this?

> @jacobs said:
> For what it's worth, standard Debt accounts can be reconciled. Loan accounts cannot be. (I don't know why.)

I guess what you meant by "standard debt accounts" refers to manual (offline) accounts.

I have another idea: if they disabled the transactions on loans because people mess them up, then make them "read-only". Some people will then complain and say they should be able to edit them. Give them an option to edit, with a caveat to say "you're on your own now, I'm not going to clean up your mess."

jacobs

@Bob Tinsman  You can, indeed, convert a Loan account to a Liability account if you wish. And then it's manual, and you can do whatever you want with the transactions, including reconciling them.

I think most people who use the Loan functionality in Quicken Mac use it without major problems; it just doesn't have "reconcile" like other accounts in Quicken. For those who have problems with functionality of the Loan account, it's relatively easy to set up a liability account and schedule a monthly transaction with the appropriate splits. It requires manually updating the split amounts between mortgage and interest each month from an amortization print-out, so it takes perhaps 30 seconds of manual intervention each month or. But for those who want to do it that way -- or did it act way before lions got built into the modern Quicken Mac several years ago -- it's a viable way to track a loan.

smayer97

Quicken for Mac never had the ability reconcile loans like other bank account registers. The only option available is to use the Adjust Balance option. In QM2007 this automatically marks all transactions prior to the adjustment date as Reconciled, with an entry to adjust the register balance to a set amount.

Chris_QPW

jacobs said:

It requires manually updating the split amounts between mortgage and interest each month from an amortization print-out, so it takes perhaps 30 seconds of manual intervention each month or. But for those who want to do it that way -- 

This is something I have never understood. It is even faster on Quicken Windows ( and old Mac I'm guessing) where there is the loan wizard that takes care of the split transaction on the checking account side (which is downloaded and reconciled).  But the "loan account" was never reconciled or downloaded.  Why people pushed to get it as download is beyond me.  The very fact that you reconcile the transaction in the checking account proves that the loan account will be correct.

And note as @smayer97 stated even if you went into the loan account to "reconcile" it the only thing "Reconcile" did is check the balance to what you entered and offered a balance adjustment if it was different.  It doesn't even set the reconcile status for the transactions before it.  You have to set them manually.

Chris_QPW

BTW I do remember the loan wizard being off by a penny every once in a while and that was always caught be the matching/reconciling in the checking account.

jacobs

Chris_QPW said:
This is something I have never understood. It is even faster on Quicken Windows ( and old Mac I'm guessing) where there is the loan wizard that takes care of the split transaction on the checking account side (which is downloaded and reconciled).  But the "loan account" was never reconciled or downloaded.  Why people pushed to get it as download is beyond me.  The very fact that you reconcile the transaction in the checking account proves that the loan account will be correct.

No, the reconciling the checking account assures that the amount paid out of checking is correct, but there could be discrepancies in the split of loan principal versus interest, and/or in the escrow split. So I do understand why someone might want to check and adjust their loan account -- I'm not sure why reconciling is needed, versus just checking the balance in Quicken versus the loan company's balance, and entering an adjustment if it's off a few cents. Typically, a monthly reconciliation would have only one transaction to reconcile.

smayer97

I'm not sure why reconciling is needed, versus just checking the balance in Quicken versus the loan company's balance, and entering an adjustment if it's off a few cents. Typically, a monthly reconciliation would have only one transaction to reconcile.

I suspect that is why reconciling of loan accounts has never been implemented in any Quicken product. A register adjustment has always been sufficient for me to adjust for the difference in principal and interest amounts in the MANY loan accounts I have had over the years, whether it be car loans, mortgages, etc. No need to complicate it further. The benefit of reconciling a loan account is simply not great enough.

Chris_QPW

jacobs said:

Chris_QPW said:
This is something I have never understood. It is even faster on Quicken Windows ( and old Mac I'm guessing) where there is the loan wizard that takes care of the split transaction on the checking account side (which is downloaded and reconciled).  But the "loan account" was never reconciled or downloaded.  Why people pushed to get it as download is beyond me.  The very fact that you reconcile the transaction in the checking account proves that the loan account will be correct.

No, the reconciling the checking account assures that the amount paid out of checking is correct, but there could be discrepancies in the split of loan principal versus interest, and/or in the escrow split. So I do understand why someone might want to check and adjust their loan account -- I'm not sure why reconciling is needed, versus just checking the balance in Quicken versus the loan company's balance, and entering an adjustment if it's off a few cents. Typically, a monthly reconciliation would have only one transaction to reconcile.

When I talk about "reconciling" I'm not talking about checking off some transactions in a "reconcile dialog/view".  To me reconciling is the process of making sure your transactions line up with what the financial institution has.  And in the case of a split for a loan that is two financial institutions, checking account and loan payment statement.  If one verifies that the transaction is correct then they will automatically be reconciling the loan account given that it starts with the right amount and no other transactions are introduced.

Note I have put a "balance adjustment" in any checking or loan account.  Because I also feel that a true reconcile never requires it.

You will notice that I left out investment accounts.  I feel the same way about them, but I know of an exception.  When Lending Club Notes they split loans into "Notes" and you buy a note.  So you get a percentage of each loan.  So when they are paid off it is possible to have fractions of a cent.  They way they handle that is by giving some people the cent this time, and remembering that they did it, and balance it out the next time.  The result is that the totals will not line up by a .01 "share" (valued at $1 per share) or .01 cent.  And as such I put in an adjustment for that, knowing that I will end up doing the opposite later.

This is of course a very rare situation, so for the most part I will stick by my statement that "reconcile" is a process, and that process is to bring your records in alignment with the financial institutions.  And unlike some people statements a reconcile can never "fail".  It can be "incomplete" (the person gives up), but it can't fail.

jacobs

Chris_QPW said:
When I talk about "reconciling" I'm not talking about checking off some transactions in a "reconcile dialog/view".  To me reconciling is the process of making sure your transactions line up with what the financial institution has.  

I have assumed most people writing about this mean exactly that they want a reconcile screen with free checkboxes like other accounts. 

smayer97

@Chris_QPW said:

Note I have put a "balance adjustment" in any checking or loan account.  Because I also feel that a true reconcile never requires it.

I think you meant to say "I have not put a ...". 

In my case, when reconciling loan account transactions, though I could go and recalculate the exact interest and principal for EACH one, I have always opted to simply enter a balance adjustment that corrects both with ONE transactions for the entire year, because that is all I need for tax purposes and nothing else. I have never found it necessary for each transaction to have each split be accurate as long as the yearly amount is correct. 

And therein I believe is a big reason why a reconciliation function is of very little benefit and suspect that there is little business drive to implement one for the same reason.

This is not to dissuade the OP from having this request. But since the conversation went down this path, I just wanted to share some perspective.

smayer97

.....

Chris_QPW

@smayer97 Thanks yes I meant I "not put..."

The interesting thing about "reconciling" is that when you bring in basically the same information from different sources then you add to how much you have to reconcile.

The reason I never had to reconcile/balance adjust the loan account is that when I was putting the payment transaction into the checking account register I would check it to being correct.  How?  Simple check the payment (principal/interest) against what the financial institution said it should be.  That is where I would catch that the payment that the Quicken loan wizard created for me was off.  So it never went into my checking account uncorrected.  Note this is back when Quicken Windows only had the process of accepting transactions in the Downloaded Transactions tab.  These days I would do it by "reviewing" the transaction.

You will notice that for this process the only thing I'm verifying against is what the financial institution has.  And in fact if if the Quicken loan wizard isn't available like I believe is true currently with Quicken Mac then I would in fact be entering it straight from that information.  And a simple look at the loan balance would tell me if I made an bad entry (comparing it to what the financial institution for the loan said).

Once you bring in downloading of transactions into the loan account you have added to the complications.  First off even though the new "philosophy" for downloading loans in Quicken seems to be "believe what the financial institution sends".  The problems people have reported clearly shows that this information can't be 100% trusted (they send the wrong information or Quicken messes up).

And if you start feeding this from both sides.  Say a loan wizard entry in the checking account and downloading in the loan account then you can of course have them "disagree".

This why I have always believed that downloading of loan accounts isn't worth the trouble it causes.  You are usually talking about on transaction a month, and now all of this complication has been added, because people thought both sides need to be downloaded.

Bob Tinsman

Thank you for the discussion; I can see you're all pretty knowledgeable about Quicken.
Actually, the real problem I'm running into is that all my loan payments from my checking account show up as "Uncategorized". When I used Quicken a long time ago, they would get categorized as transfers to the loan account, but now Quicken does things differently by default. I don't really care about downloading my transactions or not, but I just want to be able to categorize the loan payments, which seems like it should be pretty basic...or am I missing something?

jacobs

Loan payments in your checking account are generally a split: part of the payment is a transfer (no category) to the loan liability account, and part of the payment is interest expense. If you have a separate escrow (asset) account in Quicken for insurance and/or taxes, then you'd have an additional split of the payment being a transfer to the escrow account.

You can set this up as a scheduled transaction each month in your checking account, and the total payment would be correct from month t month, but the split values would need to be adjusted to match the changing values of principal and interest each month. you can do this completely manually if you want; print out a loan amortization chart from any of a zillion websites which provide one, and each month as you mark your loan payment paid, edit it to update the split values.

Of course, this is what the Loan feature in Quicken is supposed to automate for you. If you get the loan set up correctly, it will create the split transaction in your checking account for you, and the split amounts will be correct month after month.

Here's a dummy loan I just created:



After you enter you loan amount, remaining balance, interest rate on the left side, not he right side you can specify what account to use for interest expense, and you can optionally add and account for interest or taxes. (In this example, I directly expense the insurance to an expense account. but you might want that to instead be a transfer to an Escrow account, from which you record the actual insurance payment annually.)

The next screen summarize what you've entered, and what the split of your account will be. Note that in the upper left, you specify the checking account where the payment is coming from:



Then in your checking account, you can find the transaction the loan creates for you -- a split transaction as I described above:



Does that all make sense? (You may want to make a copy of your data file and play with getting the entries right, so you can toss it if something goes wrong.) Post back if you run into a problem.