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Banking and Finance  » When Microsoft Money Doesn't Balance

When Microsoft Money Doesn't Balance

After you've been using Microsoft Money for while and have been

balancing your account regularly, you will only irregularly have

trouble reconciling it. However, if you are just getting

started, you may have trouble getting your Money account to

balance. For that reason, let me offer some suggestions for

balancing a Money account that's causing you trouble.

Check for missing transactions

Account balance trouble stems from only three causes:

Reason 1: You cleared a transaction the bank hasn't recorded

Reason 2: You forgot to record a transaction, or perhaps several

transactions

Reason 3: Either you or your bank incorrectly recorded a

transaction

Therefore, when you find yourself with reconciliation troubles,

first make sure that you are not missing some transaction. Go

through the bank statement line for line, comparing each of the

transactions listed there with the contents of your account

register. If you find the bank statement lists a transaction

that your Money account register does not, then you need to

record it in Money.

Confirm you haven't incorrectly cleared transactions

Once you confirm that the Microsoft Money account register

includes all transactions, verify that you have not incorrectly

cleared transactions that are still outstanding. To do this,

thoroughly review the Money account register and make sure that

each transaction marked with a "C" does, in fact, appear on the

bank statement.

Compare amounts

If the two reviews described in the preceding paragraphs don't

explain the difference between your records and the bank's, you

need to check the actual transaction amounts that you have

recorded against those shown in the bank register. In other

words, if the bank register shows a check to your mortgage

company for $500, you need to make sure that your account

register also records the check as $500.

Unfortunately, it is easy to incorrectly record transaction

amounts in the Money account register. All it takes is pressing

the wrong key. And, in fact, two data entry errors are

particularly difficult to see: transposition errors and sign

errors.

Watch for transpositions

Transposition errors occur when you transpose, or flip-flop, the

numbers in an amount. If you write a check for $123, but record

the check as $132, for example, you've transposed the 2 and the

3. And this error is hard to spot later. You look at the bank

statement, for example, and see the digits 123. Then when you

look at the account register, you see the digits 132. Unless you

are looking not just at the digits used but also at their order,

you may miss this error.

Beware of the signs

Sign errors occur when you enter a deposit as a withdrawal, or a

withdrawal as a deposit. All this really means is that you have

entered some transaction amount in the wrong column. Again, this

error is sometimes tough to spot because the transaction appears

both on the bank statement and in your register--just in the

wrong column in the Microsoft Money register.

If you come up with some difference with your records and the

bank's that is irreconcilable, try dividing the error by 2. Then

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look for a transaction equal to this result. For example, if you

have a $200 error, divide $200 by 2 to get the result $100. Then

look for a $100 transaction that is entered in the wrong column.

Some problems account reconciliation won't catch

There are several common errors that account reconciliation

won't catch. Reconciliation won't catch when you forget to

record a transaction and the transaction hasn't yet cleared the

bank. If you forget to record a check and the check is still

outstanding at the end of the statement month, for example, the

check doesn't appear in your register and it doesn't get listed

on your bank statement. Another kind of error that a bank

reconciliation won't catch stems from entering a fictitious

transaction in the account register. For example, if you enter a

check in the Money account register that you never wrote or a

deposit you never made, the check or deposit will never clear

the bank.

Unfortunately, there is not much you can do to find these sorts

of errors. Mostly, you need to apply simple common sense to

prevent them. In the case of forgotten uncleared transactions,

your only recourse is to be careful in your record keeping. Try

to establish a system whereby you regularly record the checks

you write and the deposits you make.

About the author:

Seattle

certified public accountant & author Stephen L. Nelson wrote

the Microsoft Money Guide to Personal Finance, Quicken for

Dummies and more than 100 other books as well. Nelson holds an

MBA in Finance and an MS in taxation. His web site is

http://www.stephenlnelson.com