All — First, I want to apologize for the length of this rant. We will
always agree to disagree on this subject. Please understand, I am a
retired 30 year bank auditor. I know the purpose of what a
reconciliation
is. But what I don't understand is this obsession with doing monthly
reconciliations for personal accounts on your computer.
First, I have not received a "paper" statement from my bank in over 20
years. My statements are all online. Second, I sign-in to my
(checking
and credit card) accounts almost daily. So I know exactly when every
deposit or charge hits my accounts. Third, in this day and age, I
write,
maybe, one check a month, to my landscaper who does not have direct
deport. Other than that, my 20-30 transactions per month are all
electronic. Also, I charge almost everything on my charge card. So
any
money I spend is on my charge card statement.
Fourth, I enter transactions in GnuCash whenever I feel I have a few
spare
moments and my GnuCash balances nearly always match my online account
balances except for when my landscaper takes too long to cash his
check, or
an electronic transaction takes more than a day or two to clear.
Fifth, the
whole purpose of the reconciliation process is to identify transactions
that you either know to be coming or that you think will be coming that
have not been reflected on your current bank balance so you don't
overdraw
your account or so that an unauthorized charge does not slip by.
With that backdrop — as you can probably tell, I have not done an
old-fashioned monthly bank reconciliation in eons. Technically, since I
sign-in almost every day, I guess you can say I do a
mini-reconciliation of
my accounts daily (or almost daily!) and because of that, I know
exactly
what my balance is almost all the time. Additionally, if I see any
unknown
transaction online (which is like never!), I can call my bank almost
anytime and discuss with them what the transaction is and usually
get it
rectified rather quickly. And the benefits of looking at my account
everyday is that I can see it hit that day!
So, with all that being said, can someone please explain to me why
people
are wasting their time doing manual C/N reconciliations on a bunch of
transactions on their computer? I would think they could use their
time
much more effectively doing something else. You see, the reason for
reconciliations in the past were that you did not have the access,
as you
do today, to go and see exactly what the balance is or what
transactions
have cleared in your account, anytime, anywhere, 24-hours a day!
Reconciliations are vital for a business so they have documented
proof of
their transactions. Also, they sometimes are required by government
regulations or company policies. So I get their need in the business
world. But reconciliations for your personal accounts are a thing
of the
past. In this day and age, transactions clear pretty quickly. The
longest
it takes for a transaction to clear is usually a manual check - and
that's
only dependent on how long it takes for someone to deposit it into
their
account. Hell, I have had some transactions clear in as quick as 10
seconds (for internal transfers or internal payments to a bank CC).
Again — there will be many who will totally disagree with me, and
that's
OK, but I still don't see the reason for a monthly reconciliation
process
to true up your personal accounts. Waiting until you get a
statement in 30
days to see if your GNUCash balance matches the bank is crazy to me
when I
can see it and balance it every day!
In the end - I guess my 1 minute per day is probably someone else's 30
minutes at the end of the month or whenever they get their electronic
statement. But in today's electronic banking environment, why would
someone wait 30 days to get a statement from the bank to reconcile
their
personal accounts, when they can see the balance on their own, any
day and
anytime and balance it daily? Seems counter-intuitive and
counter-productive to me. But I guess that's just my preference.
Ken
PS - by the way — this is also exactly why banks charge for paper
monthly
statements now. They are required by law to give you a statement -
but if
you want it on paper - they are allowed to charge for that paper
since it
is available electronically all the time - everyday after they
generate it.
