Setting account balances flexibly – different options for different needs.
BGR allows a flexible method for setting balances that recognises that, with personal finances, not all transactions may be completely entered. This is because the purpose of entering & categorising transactions, may be simply to create an accurate budget rather than maintain full accounting records.
A useful example is where you want to import the last 3 months transaction to quickly formulate a budget. (This is a good strategy if you will not be wanting to enter any earlier transactions.) While it will not be completely accurate, (e.g payments less frequent than 3 months such as insurances won’t show), it will get you started quickly. While you can then go back and enter transactions prior to the last 3 months, this will markedly complicate the accounting process because balances will have to be set multiple times. Thus, we suggest you try to enter the earliest transactions first, and set your Statement Balance at that date.
Setting the Statement Date for your Statement Balance
To achieve this flexibility BGR allows transactions to be considered in two categories relative to a defined date called the Statement Date. (You can have different Statement Dates for different accounts, depending on how much data you have for each.)
Normally, you would like to set your Statement Date back to the date before your first transaction.
But, you can only do this if you have a full set of transactions. This is the only way to guarantee correct closing balances.
Thus, you should set the Statement Date & Statement Value to the earliest date from which we have a full set of transactions going forward.
A Statement Date can be any date after 1/1/2000.
The balance of the account at the end of the Statement Date is the Statement Balance.
You can set the Statement Date & Balance either before you import any transactions, or after this has been completed.
Printed Statements and the Statement Balance
As well as your electronic downloads, your bank will supply you with either a traditional Printed Statement or an electronic PDF in non-alterable form. Both of these documents are in an auditable form and are referred to as “Printed Statement” in the discussion below.
So if you wanted to keep records from 1/7/2008 onwards, and had complete records form this date, you would enter:
- Statement date as 30/6/2008
- Statement balance as the closing balance at 30/6/2008, on your Printed Statement.
- Enter all transactions from 1/7/2008 onwards.
Note 1: Entering the 1/7/2008 as your statement date implies a balance at the end of the 1st day of July, not at the end of the previous day.
Every transaction after the Statement Date must appear in the Transaction Register. The Closing Balance calculated by Budgets GetReal is the sum of the Statement Balance and all subsequent transactions. The Closing Balance will only differ from your Printed Statement if you have incorrectly imported transactions i.e. (you have missing or duplicate transactions).
The Statement option in the Transaction Register allows you to reconcile all transactions. (These should be a complete match after the Statement Date – but could be incomplete on or before the Statement Date.)
In Summary:
- You can rely on balances after the Statement Date.
- You cannot rely on balances on or before the Statement Date.
- If you have imported the transactions correctly AFTER the Statement Date, you DO NOT HAVE TO SET a Statement Balance each time you import. (The balance on your Printed Statement should be the same as on your closing balance or current balance in Budgets GetReal.)
- However, if you have imported or entered transactions BEFORE the Statement Date, you HAVE TO RESET a Statement Balance.
How to Set a Balance.
You can set Balances in several ways:
From the main list of Accounts: Click on the Account name & select Set Balances
From the main side menu bar: Set & Maintain > Accounts > Select the Account and then open the Balances tab.
The following example is one where you have already imported transactions and set a balance. You have clicked on the “Enter New Statement Details” button to permit altering statement dates and balances.
For this example you will see
The first transaction is the 1/9/2008. The Statement Date is 19/2/2009 and the Statement Balance is $4,735.82
Balance calculated at Statement Date is an ongoing calculation taken your last setting of the balance to the Statement Date. If there are transactions before the statement date, (as in this case from the 1/9/2008), the Statement value and the Calculated Balance would NOT be the same, unless the balance had been reset. In this case the Statement Value and the Balance calculated are the same, indicating that the balance was successfully reset.
If the transactions from the 20/2/2009 to 15/5/2009 have been all correctly entered, the Current Balance of $3,017.94 should agree with the closing balance for that date on your Printed Statement.
Setting the correct sign for your balance
If setting for a credit card, your balance is the amount you owe on the card. This would usually be entered as a negative amount e.g. -1000 if you have spent $1,000. (It is not the amount which you can still spend, before you reach the limit of your card, an amount the credit card provider calls the “available balance”.) The same rules apply on mortgage accounts or other loans; it is always the amount you still owe!
For an asset (savings, investment, cheque and direct debit) account, the balance should be a positive number. This is money you own!
Importing prior to Statement Date
As a final reminder, once you have set a Statement Date and Statement Balance, importing or manually entering any transaction on or before this date, will change the Statement Balance, and the balance of every day after the Statement Date.
You have to reset the Statement Balance, in this situation to keep your balances accurate!
