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New user needs to reconcile for the first time

Wxman2

First post here, so be gentle. I set up Quicken to help my poor wife take care of our checking account. After going through all the entries, setting up the memorized transactions, etc., we noticed that the current balance never matched the balance the online bank records showed. I've read all the info online about this, and it sounds like it's our opening balance that is the culprit.
My question is does anyone have any tips on the best way to do a reconcile of this new setup that will go back two years?

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splasher

Start out with everything but the Opening Balance (OB) transaction in C or blank CLR state. Only the OB should be reconciled, R.

Then start with the oldest month and reconcile it. Now, to get it correct, you may need to change the OB, but it should never need to be changed after that.

Then work your way through the months, one at a time. If Quicken suggests that an adjustment be made, DON'T do it. Find the mistake. In almost 30 years of using Quicken, I have never made an adjustment and it was generally a typo when I was doing things manually.

Make backups as you go after each successful reconcile, you only have to keep the last one. That way is something goes horribly wrong, you can restore the backup and be back to where you were before disaster hit.

The rationale for doing it in monthly chunks is that it is easier to find an error in just a month's worth of transactions versus a longer time frame.

RalphC

I don't think there's any magic bullet that's going to resolve your balance issues which go back two years. What I would do is make this the first day of the rest of your life. Try to reconcile to the latest statement and assume that the financial institution is correct by entering a Balance Adjustment to agree with your bank(s) balance. From here on, you'll make daily transaction entries, and reconcile monthly, to stay current and accurate.

Wxman2

I can't do this for "real" till I get back home (I'm at work), but I looked at the backup copy I had dumped on my laptop to practice with, and I see a 'C' in the clear column, and 'R' for the opening balance. Is that the state you mean it should look to start this?
We don't get paper copies of our checking statements, but I can pull up statements on the bank's website from well before we started using Quicken. Do I need to go through each transaction one at a time, or does the auto reconcile do all that?

splasher

Yes, regarding the Cs & R. To start with, you only want the OB in R status, as you reconcile, the transactions will be turned into Rs each month.

Auto reconcile only has to do with importing downloads from your financial institution, if the information is already there or you are entering it manually, there is no auto reconcile involved, just reconciling to the "paper statement".

Wxman2

Yes we are auto downloading from our bank, nothing is getting entered manually. If I open the account, and tell it to reconcile using online data not paper, the window that comes up shows zero as the difference in the cleared and statement. According to the instructions all I need to do is click done. I must be doing something wrong because you say I should do one month at a time, but this is showing all the transaction from 22 on till now. Sorry for sounding dense. I really am good at this stuff usually.

Chris_QPW

There are three different ways to do reconciling.

"To statement"

"To the online balance, with you starting the reconcile"

"To the online balance, with Quicken starting the reconcile automatically after the download."

"To statement" is a bit misleading. It just means that you will be entering the balance amount and date. This could be a "statement", but it would also just be an amount/date you get off of the financial institution's website. Clearly if you are really reconciling to the statement that is once a month, but you don't have to do it that way.

"To the online balance, …" When you download transactions an online balance amount and date is also downloaded, that is what the reconcile will be using when you reconcile to the online balance. Be warned, for some financial institutions this might not be right, or it might be right at certain times and not at other times so don't take it by "blind faith".

I don't recommend using automatic reconcile mode if this option is on:

What the above option does is you get the transactions directly into the register and you should review them before you reconcile to make sure the payees and categories are correct. If you aren't using this preference the transactions will be put into a Downloaded Transactions tab at the bottom of the register and you should click on them and accept them into the register one at a time making sure the payee and category are correct. Here is some more information about reviewing transactions:

https://community.quicken.com/discussion/comment/20427985#Comment_20427985

Now back to reconciling, with the terms and such out of the way.

https://community.quicken.com/discussion/comment/20428232#Comment_20428232

The "reconcile status" is the Clr column. Blank for a transaction that you have manually entered (or a reminder entered) but has yet to clear the bank (Uncleared), c for cleared (downloaded transactions are marked with the c, because they have cleared the financial institution). And R for reconciled, which only gets set by the reconcile process.

So, since you are reconciling to the online balance that will be the ending date/amount, the "start" is actually from the beginning of the register. Quicken adds up all the reconciled transactions in the register and all of the cleared transactions up till that date to get the "Cleared Balance". Here is an example of a reconcile.

The green checkmark is the same as the c in the Clr column in the register. Above I have one cleared transaction and one that hasn't cleared yet (manual entered so you can see what it looks like). This what it looks like in the register.

You will notice that the difference is zero, so the reconcile is correct. Just as the one you did is correct. I'm going to click Done and show you what happens in the register.

Each transaction that was in the cleared state in the Reconcile Dialog is now marked with R for reconcile.

Now let's talk about your original problem.

As I said, it is possible for the online balance to be wrong. Another possibility is there has been a bug in Quicken since the beginning of the year for accounts setup with Express Web Connect or Express Web Connect + where the download is missing transactions. Clearly if that is the case the reconcile will fail (you will have a difference). You can see what the connection type is by looking at the top left of the register. The other possible connection type is Direct Connect.

Now say you run a reconcile and something is off. That is where the "work" of reconciling comes in, finding out what is wrong/missing. And I will state that there have also been bugs reported that Quicken has changed the Opening Balance (The first transaction in the register) when it shouldn't so do check that if you are all of sudden not reconciling.

I will point out that they just allowed for pending transactions to be shown in the register (if you Automatically add to banking registers on, or in a Pending Transactions tab at the bottom of the register if this preference is off.), but pending transactions are never included in the reconcile.

So, the online balance that you reconcile to should always be what has cleared, and that is what you should be looking at when comparing to your financial institution's website/App.

One big question is what was done when you noticed that things didn't match?

From your original question I take it that you have not been running reconcile. Even though you should be running reconcile on a regular basis this might be a good thing, because it means that you probably haven't put in a balance adjustment. A lot of times when people can't figure out the difference, they just select Done in the reconcile and Quicken will put in a balance adjustment. This might paper over the problem for a bit, but then the missing transactions might show up or the online balance gets corrected and then you are off again.

For example, I will purposely mark the transaction that hasn't cleared the financial institution as cleared and do the reconcile.

Selecting Done:

Selecting Adjust.

Wxman2

Wow, thank you so much for all the help! We haven't done much of anything with Quicken actually accept downloading, and setting the memorized transactions. We have never tried to reconcile it at all, so nothing has been done. My wife doesn't trust it yet, so she's doing how she's always don it.

Right now my wife does all the checking, she won't let me touch it. She has always gone on to our bank website, print out all the transactions she hasn't entered into her hand drawn, yes, hand drawn, check register made out of a blank book. She does it every few days so she always knows what's going on. I talked her into us trying Quicken so she wouldn't have to do all that anymore. Also it's hard come tax season to pull out all the amounts I need to do the taxes.

I'm not sure, because I haven't tried the other method you said, but I think she would probably like the auto add transactions into the register method. I have the filters already set up for the memorized transactions, and that way she just would compare the website to what Quicken shows , making corrections when needed. I haven't seen how it works using the "Downloaded Transactions tab ".

Once I get home form work I'm going to give your suggestions a try. I hope I'm not going to have to delete the account and start over. I'd hate to loose all the categories, and memorized transactions I made. Somehow, I'd like to take what we have now, go back the 2 years, and start one month at a time reconciling for then. I'm hoping using your instruction I pull that off. Sounds like it's going to take a while but I hope when I'm done my wife will start trusting it.

Chris_QPW

Don't delete the register, you might not get the transactions back. There is a limit on how far back you can download of transactions.

From what you said where you had a zero difference, that account sounds like it is properly registered. Like I said that the online balance may be wrong at certain times, and you have to understand when the financial institution has it properly updated.

But for sure, reconciling is the process of making sure that what you have in Quicken is what the financial institution has. So, by going through that process hopefully will ensure more confidence in how it all works for you and your wife. But please not that it isn't just "clicking Done". Well, it is if the account reconciles. But before you even get to the reconcile want to make sure that the transactions you have, have the right payees and categories. And if it doesn't reconcile that you track down why. Understanding why it isn't reconciling will also build confidence in the reconcile process.

Wxman2

I am sure you must be getting sick of me by now! I'm home, and I pulled up our new Quicken showing our checking accounts. The OB starts 02/22/2022 and shows R. All the other up to today are just marked C. I can pull up the individual transaction online for our bank covering any period of times even starting before then. What it doesn't show is Balances for those past dates. I'm not sure if I can get actual statements from those old dates, but I'll check.

In the mean time, if I try to use the reconcile tool, it wants me to enter prior and ending balances. If I go back to 02/2022 I don't have either to enter.

You said do one month at a time, so I figured I would start at 02/22/2022 and go one month at a time from then. Obviously that isn't going to work.
Can I just manually go through the old online records and change the C to R as I find them?.

If I update the accounts so it's the latest transactions, then I click the Reconcile an Account > Use Online Balance then click OK, I see all of it, but now it is showing a difference amount. Did you mean start there, and go through them one at a time, oldest to newest, matching them with the archive records from the bank?

Wxman2

I will give you an example of what is showing now. Say for example I have a current balance on the bank website showing $5000.00. I have three Pending transactions also showing that are included in the online bank ending balance. Lets say each of pending are $10.00. Those three Pending transactions are not showing on Quicken.

If I go through all of my quicken transactions, they show cleared. When I click the Reconcile an Account > Use Online Balance then click OK, all the deposits, and payments are cleared. The balance in the Reconcile box says a difference of $100.00. If I click Done, it wants to add the balance adjustment to match the bank's. The problem I see is the bank balance also includes the three Pending. Won't that just make the balance wrong again?

Chris_QPW

I will start with this comment first:

https://community.quicken.com/discussion/comment/20428552#Comment_20428552

The whole purpose of the Opening Balance transaction is to account for what might have happened in the past before the transactions that are entered into the register. Say you opened an account today and downloaded that into Quicken, so that Quicken has all the transactions that account has. Then by definition the account would have started with an opening balance of zero. But if there are "older transactions" that aren't in Quicken, then the opening balance is going to be the balance it was on the day before the first transaction was entered into the register. So, make sure that is true before going on. It sounds like it is but is good to check. It also helps if you put that amount in the memo of the opening balance because there have been bugs in Quicken that have changed that amount at times.

https://community.quicken.com/discussion/comment/20428559#Comment_20428559

The important thing to understand here is that pending transactions should never be included in the Online Balance that is downloaded with the downloaded transactions. The Online Balance is used for the reconcile, and you can't reconcile pending transactions, because they might never clear the financial institution.

Unfortunately, it is a long-standing problem that the Online Balance being downloaded isn't 100%. Some financial institutions do it perfectly, some include pending transactions in the amount when they shouldn't (which is what it sounds like is happening to you), and some have the amount/date correct "sometimes". For really a really crazy example, Chase checking accounts include pending transactions in the Online Balance, but only on weekends and holidays. But their credit card accounts don't have this problem at all.

So, how to deal with this problem?

There are two approaches. One is to learn why and when it is wrong and then avoid reconciling at those times.

But if it is consistently wrong or maybe even to gain more confidence in the process, the answer is to stop using it.

If you right click on the account name in the Account Bar, and select Edit/Delete account, and select the Online Services tab at the bottom is a checkbox for turning off Reconciling to the online balance.

With that off, when you run reconcile you will get a dialog like this:

Select Paper statement. Even though it says "paper statement" it really means that you can now enter the ending date (ending statement date) for the reconcile, and the ending balance for that reconcile (the other amounts would be zero, if not zero it would enter transactions for them which should never be the case for when you are downloading all the transactions).

So, you can now put in the real "online balance" from your financial institution. Just make sure it doesn't include the pending transactions.

EDIT: I also suggest that you select Help → Report a problem, and report this to Quicken Support, which might help them get this problem fixed.

Wxman2

Your steps worked. I had to make a adjustment to the balance but it's all matching the bank. I didn't make the adjustment to the opening balance, instead I just let it add the adjustment where it was after running reconcile. Thank you again for all the help.

Chris_QPW

https://community.quicken.com/discussion/comment/20428695#Comment_20428695

Well, the best practice would have been to track down what was wrong with the past transactions and not accept any kind of balance adjustment. If it is in fact just something missing/wrong in the past transactions a balance adjustment may allow you to go on without worrying about what happening in the past, but the fact that you don't know what caused the problem leaves open the possibility of whatever caused the problem in the past will return (it might return in any case, but at least you would know the "why" and maybe the workaround).