How to balance checkbook starting in the middle of the year
If you have NO checks or deposits in the beginning months, follow these simple steps. Let’s say you want to start balancing the checkbook for the month of June. For this you will need the banking information as of May 31st.
First you need the bank statement ending balance for May 31 (which is the same as the starting balance for June 1st). Enter that number here…………………......................................................... $___________________(a)
Now you need the list of checks outstanding (not cashed by the bank) as of the May 31st bank statement. Enter the total of these checks here……............................................................………..$___________________(b)
Subtract (a) minus (b). This is your checkbook balance. Enter the number here..$___________________(c)
Now, take the checkbook balance number in (c) and enter that number in Property Menu -> Opening Entries Tab -> Checking Account Code (debit amount). (Note: The Opening Entries must have equal debits and credits so when you add the debit to the checking account, you should add an equal credit to some other account – such as – the default account [187000] or the capital account [360300]). See screen shot below.
Next, enter each individual outstanding check in Checkbook Menu -> Balance Checkbook Tab -> Year Starting Outstanding Items Button. (Note: Outstanding checks here are entered as negative numbers.) See figure screen shot below.
Note 1: If you have not been balancing your checkbook manually or through some other program and you do not know what checks you have written prior to May 31 that have not cleared the bank, we can suggest that you look at your June bank statement and figure it out. Of course, come July, August and future months more outstanding checks may show up and you will have to make adjustments to the numbers above.
That’s all. You are ready to start balancing the checkbook.
To balance the checkbook, see the instructions in the Help Manual – Section VI(d). Begin with Steps 4 et seq.
Note 2: If you already have data in RIS (checks and/or deposits) in the beginning months (prior to June for our example), then, in addition to the simple steps outlined above, you need to make a journal entry to reverse the total of the deposits and the total of the checks for the prior months (January to May)..
For example, let’s say you want to start balancing the checkbook for June and you already have data in the first five months, you will need the following data:
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Total dollar amount of checks written for January 1 to May 31. You can get this number from the Reports Menu -> Checkbook Tab -> Cash Disbursements Report (January through May). This number must be entered as shown below as a Journal Entry in May. The total of the checks should be entered as a debit to the checking account (and credit to the default account).
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Total dollar amount of deposits written for January 1 to May 31. You can get this number from the Reports Menu -> Checkbook Tab -> Cash Receipts Report (January through May). This number must be entered as shown below as a Journal Entry in May. The total of the deposits should be entered as a credit to the checking account (and debit to the default account).
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NOW, in the Balance Checkbook program, first get a zero balance for May 31 by entering into the Add/Edit bank statement the May 31 ending balance and then checking off all of the deposits, checks and journal entries for January thru May 31 (except for the checks that did not clear the bank (Year Starting Outstanding Items). You should get a zero difference for the bank balance. If you do, you are good to start the next month. If you don’t, do not continue without help because you will never get a good balance bank statement report if you start off out of balance.
Sample journal entry screen:
Sample Good Starting Balance Screen:
