Credit commissions, more than 2 decimal places, Rounding to net Cash

jmclellan

I had reported issues 3 years ago due to downloaded investment transactions causing reconciliation nightmares for my Brokerage account - Interactive Brokers (IB). I am sure that it applies to other brokers also, but I have only used IB for the last 12+years.

I am a retired CPA, and accurate reconciliation is probably much more important to me that most users, but I also believe that you can't write accounting software that is not accurate!

I spent hours with Level 2 support, demonstrating the issues. Provided data files and QFX files to import into test systems to see prove the behavior. As far as I can tell, they have never made any attempts to fix!

Yesterday I spent time with level 1 support, chat and then phone and screen share on another issue (downloaded transaction window not displaying and scrolling correctly), and I brought up and demoed the amount differences while doing that. This contact, had me looking through the community to find out if others have brought up the issue, and although comments on my 3 year post immediately after posting it, I could not find anything new, so I decided to bring it up again.

The issues are pretty easy to summarize:

1. Lopping off anything more than 2 decimal places during import into the downloaded transactions window. It appears that they properly handle carrying out the price for more decimal places (I have my settings set for 6 decimal places). IB carries both the commission and net amount out to at least 4 decimal places. This of course gets summed together, and only makes pennies different, but the nightmare occurs when there are multiple lots. Quicken is importing each lot, so lopping off the partial pennies on each lot adds up. Quick example - IB provides the each lot of the trade as a 1.0199 commission on a $100 transaction, so a net cash amount of $98.9801. There are 10 lots, exactly like this. The net cash amount totals $898.851, and rounds to $989.80. Quicken is lopping off the .0099 commission, and brings each transaction in as $98.99, and $989.90 combined for all lots. When accepting each lot, the net amount is different is different in the transaction screen and the downloaded transactions Amount column by .01. "Correcting" the transaction in the registers, causes Quicken to remove the match. So I have stopped correcting the penny differences.
2. Net amount in the Register verses the Amount in the downloaded transaction window do not appear to be used in the "matched Transaction" test. If you modify the commission or price in the register to get the net amount right, Quicken removes the match. When you edit a transaction in the register, it asks you if you want to modify the price, shares, commission to make the net amount work, so not sure why that doesn't get tested in the matching transaction.
3. Negative Commissions - IB gets clearing rebates from exchanges, and passes them along to the traders. This usually is reduced commissions, but sometimes it is negative commissions. During the Downloaded transaction window populating, Quicken ignores the negative sign in the download in formation; -1.00 become 1.00. This makes the net amount off by $2!

I have found that the quickest way for me to get around this issue is to accept the transactions as they come in, so they are matched and cleared, and then adjust the commission so the Cash Amount is correct. This is very cumbersome, so I have stopped worrying about the penny differences, and only try to catch the negative commissions. Each month's recon of my active trading accounts results in as much as .50 net difference, which I just adjust to the most recent trade commission.

I can't believe that I am the only Quicken user and active investor who fights with this issue! Please reply to let me know that I am not the only one who cares!

q_lurker

I have seen other users cite IB as their brokerage, so you are not alone in that regard.

I have not seen others mention the negative commissions issue. Since direct manual entry accepts a negative commission entry, the 'correction' applied to the download where the negative sign is omitted would be a bug in my opinion. I can understand the programmer's rational given the unusual nature of such a commission, but that does not make it right.

Broadly speaking, the conventional wisdom is to have the transaction shares and amount correct in the transaction list letting Quicken then compute an 'effective' price/share. Commissions have no real importance. I can understand an investor's interest in minimizing total commissions, but Quicken's ability to present those commissions or a summary of them is certainly limited.

I have never seen a brokerage carry 'net amount' or transaction amount out beyond 2 decimal points.

I am not clear what you mean by "Quicken is importing each lot". The brokerage downloads transactions to Quicken. You make it sound like IB is reporting several transactions with a combined commission for several of them where the net combined commission (to 2-decimal precision?) is not the same as the sum of the individual commissions (which IB figures at 4-decimal precision?). But Quicken is truncating for each individual transaction the commission and thus the net amount. Correct?

To me, IB's methodology sounds odd and I would not necessarily want or expect Quicken to emulate it. As a user, I would focus on making sure each transaction recorded in Quicken matched the broker's transaction (singular) on shares and cost. I tend to omit commission and let the price/share fall where it may.