<?xml version="1.0" encoding="UTF-8"?>
<chapter id="details.reconcile">
<chapterinfo>
  <authorgroup>
    <author> &Michael.T.Edwardes; &Michael.T.Edwardes.mail; </author>
    <author> &Jack.H.Ostroff; &Jack.H.Ostroff.mail; </author>
  </authorgroup>
  <date>2024-12-01</date>
  <releaseinfo>5.2.0</releaseinfo>
</chapterinfo>
<title>Reconciliation</title>

<sect1 id="details.reconcile.whatis"><title>What is reconciliation?</title>
<para>
  Reconciliation is the process of assuring that your records for an account agree
  with the records of the institution for that account.  This is done by matching the
  transactions you have entered into &kmymoney; with the transactions listed for that
  account by the institution.  This is most commonly done with the list of
  transactions in a statement, be it a bank statement, credit card statement, loan
  statement, or any other statement.  It can also be done against an on-line listing
  of the account, although this is less common.  If any discrepancies are found, then
  either you or the person who created the statement have made a mistake.
</para>

<para>
  Completing the reconciliation process for an account says that you are sure that
  the records for that account, up to the date of the reconciliation, are
  correct.  This is most commonly done for accounts at institutions like banks or
  stores, but some users choose do to this for other accounts, such as cash.  In that
  case, it means that you are sure of the records up to the reconciliation date, and
  are certain you will not find any further cash receipts, and that the balance of the
  account in &kmymoney; is the same as the actual amount of cash in your pocket.
</para>

<para>
  Reconciliation is not required for any account, but by reconciling an account on a
  routine bases, such as monthly, you will have fewer records to examine if you do
  find a discrepancy.
</para>
</sect1>

<sect1 id="details.reconcile.wizard"><title>The reconciliation wizard</title>
<para>
  Note that as you progress through the reconciliation process, there are multiple
  possible paths for entering all the necessary data, especially if you need to find
  and correct some discrepancy between &kmymoney; and the statement.  All are valid,
  and one is not any better than another.  Over time, as with many activities within
  &kmymoney; you will find the way that best meets your needs and approach to
  managing your finances.
</para>

<para>
  To reconcile an account, select the account in the Accounts or Institutions View,
  or display it in the register, then click the
  <guiicon><inlinemediaobject><imageobject><imagedata fileref="reconcile.png"
  format="PNG"/></imageobject></inlinemediaobject></guiicon> reconcile icon, select
  the <menuchoice><guimenu>Account</guimenu> <guimenuitem>Reconcile...</guimenuitem>
  </menuchoice> menu item, or use the
  <keycombo>&Ctrl;&Shift;<keycap>R</keycap></keycombo> shortcut.
</para>

<para>
  This will open the reconciliation wizard.  The first page of the wizard briefly
  describes the process you will follow.  Click <guibutton>Next</guibutton> to
  actually start the wizard.
</para>

<screenshot>
  <screeninfo>reconciliation wizard intro</screeninfo>
  <mediaobject>
    <imageobject>
      <imagedata fileref="reconcile1.png" format="PNG" />
    </imageobject>
    <textobject>
      <phrase>reconciliation wizard intro</phrase>
    </textobject>
  </mediaobject>
</screenshot>

<sect2 id="details.reconcile.wizard.statement"><title>Statement details</title>
<para>
  The initial statement date presented by &kmymoney; is typically 30 days after the
  more recent reconciliation for that account.  The starting balance presented is the
  final balance as of the previous reconciliation.  This is actually calculated as
  the sum of the amounts of all transactions in the account which are cleared or
  reconciled, up to the date of the previous reconciliation.  The ending balance
  presented is the starting balance plus the amounts (added for deposits and
  subtracted for withdrawals) for all cleared transactions for the account since the
  previous reconciliation.  (This also includes cleared transactions prior to the
  date of the previous reconciliation.)  If the starting balance does not match the
  statement, then you need to confirm that the previous reconciliation was done
  correctly.
</para>

<para>
  Theoretically, the ending balance at the time of the previous reconciliation should
  not be different from the starting balance at this time.  However, &kmymoney; does
  not prevent you from making changes to transactions prior to the most recent
  reconciliation.  Edits of this type are the usual cause of such discrepancies.  At
  some point, &kmymoney; will probably be enhanced to make it much more obvious to
  the user if such an edit is made.
</para>

<para>
  The statement date, starting balance, and ending balance can be found in your
  statement.  Make sure that the figures match and click <guibutton>Next</guibutton>.
  If the starting balance does not match, see the previous paragraphs.  If the
  statement date or ending balance does not match then enter the figures as listed on
  your statement and click <guibutton>Next</guibutton>.
</para>

<screenshot>
  <screeninfo>reconciliation wizard starting information</screeninfo>
  <mediaobject>
    <imageobject>
      <imagedata fileref="reconcile2.png" format="PNG" />
    </imageobject>
    <textobject>
      <phrase>reconciliation wizard starting information</phrase>
    </textobject>
  </mediaobject>
</screenshot>
</sect2>

<sect2 id="details.reconcile.wizard.interest"><title>Interest</title>
<para>
  If you are reconciling a bank account or any account with interest and/or charges
  or fees, then enter these values in the appropriate fields.  Both fields are
  optional, but if they are used, then a category must be assigned for each amount
  entered.  Note that these amounts may have already been entered if you import
  transactions either directly or via a downloaded file, in which case you should not
  enter them again here, or you will have duplicate transaction.
</para>

<note><title>Interest or Charge</title>
<para>
  The interest field is for interest you gained.  If you have to pay interest, &eg;,
  for a credit card account, this should be entered as a charge.  In both cases, you
  get to choose the proper category for the amount.
</para>
</note>

<screenshot>
  <screeninfo>reconciliation wizard interest and charges</screeninfo>
  <mediaobject>
    <imageobject>
      <imagedata fileref="reconcile3.png" format="PNG" />
    </imageobject>
    <textobject>
      <phrase>reconciliation wizard interest and charges</phrase>
    </textobject>
  </mediaobject>
</screenshot>

<para>
  Click <guibutton>Continue</guibutton> to start matching your statement to what
  you have entered.  Note that this completes the Reconciliation Wizard, but not the
  process of reconciliation.  At this point, &kmymoney; displays the Ledgers View for
  this account, but it changes the ledger display in two ways.  First, it only shows
  transactions that have not already been marked as reconciled.  Second, the line
  below the main ledger display shows the Ending Balance from the statement on the
  left, the cleared balance of the account in the center, and the difference between
  then on the right.  As described below, you still need to clear transactions and
  then tell &kmymoney; that the account is reconciled.
</para>
</sect2>

<sect2 id="details.reconcile.wizard.clearing"><title>Clearing transactions</title>
<para>
  During the reconciliation, any transaction can be edited to make it match the
  statement, and new transactions can be created as usual.  To mark a transaction as
  cleared, click the <guilabel>C</guilabel> column of the transaction in the ledger.
  You can also select the <menuchoice><guimenu>Transactions</guimenu></menuchoice>
  menu or right-click the transaction to bring up the "Transaction options" context
  menu, and then select <menuchoice> <shortcut> <keycombo> <keysym>&Ctrl;</keysym>
  <keysym>&Alt;</keysym> <keysym>&Space;</keysym> </keycombo></shortcut>
  <guisubmenu>Mark transaction as...</guisubmenu> <guimenuitem>Cleared</guimenuitem>
  </menuchoice>; A transaction is considered cleared when it matches the transaction
  on your statement.
</para>

<para>
  As you mark transactions as cleared, the Cleared and Difference amounts shown below
  the ledger will be updated.
</para>

<para>
  Note, however, that as reconciliation is the process of matching the data in your
  account with that on a statement, the Cleared amount shown below the ledger is the
  cleared amount as of the date of the statement.  Changes to any transaction with a
  date after the statement date you entered in the wizard will be saved, but will not
  have any effect on the cleared amount shown below the ledger display.
</para>

<screenshot>
  <screeninfo>ledger during reconciliation</screeninfo>
  <mediaobject>
    <imageobject>
      <imagedata fileref="reconcile4.png" format="PNG" />
    </imageobject>
    <textobject>
      <phrase>ledger during reconciliation</phrase>
    </textobject>
  </mediaobject>
</screenshot>
</sect2>

<sect2 id="details.reconcile.complete"><title>Completing Reconciliation</title>

<sect3 id="details.reconcile.finish"><title>Finishing Reconciliation</title>
<para>
  When the difference between the statement and the cleared balance is zero, then the
  account is reconciled and you can click <guibutton>Finish</guibutton>.  When you do
  this, &kmymoney; takes all the transactions which have been marked as cleared (only
  those with a date before the statement date) and marks them as reconciled, and the
  value in the <guilabel>C</guilabel> column changes from <quote>C</quote> to
  <quote>R</quote>.  In addition, it saves the changes and records that the account
  has been reconciled. (You still need to save the file to permanently save all the
  changes.)
</para>
</sect3>

<sect3 id="details.reconcile.report"><title>The Reconciliation Report</title>
<para>
  The last thing the reconciliation wizard does it to present a report, in the form of a pop-up with two tabs.
</para>

<sect4><title>Summary Tab</title>
<para>
  This tab shows a summary of the reconciliation, including the starting and ending
  balances, and the number and amount of payments and deposits: cleared, outstanding,
  and those after the reconciliation date.
</para>
</sect4>

<sect4><title>Details Tab</title>
<para>
  This tab shows a list of outstanding payments and charges.  These are unmarked
  transactions prior to the statement date of the reconciliation.
</para>
</sect4>
</sect3>

<sect3 id="details.reconcile.postpone"><title>Postponing Reconciliation</title>
<para>
  If you're having trouble completing the reconciliation, or you need to gather
  additional information before you can complete the process, you can postpone the
  process to a later time by clicking <guibutton>Postpone</guibutton>.  When you do
  this, &kmymoney; remembers the values you entered when you started the wizard, it
  does not mark cleared transactions as reconciled, and it returns the ledger to its
  normal view.  If you exit &kmymoney; before clicking either
  <guibutton>Finish</guibutton> or <guibutton>Postpone</guibutton>, it has the same
  effect as clicking <guibutton>Postpone</guibutton>.  Any edits you have made, such
  as marking transactions cleared or entering new transactions, are not touched, and
  you can still save them before you exit &kmymoney;.  However, you will have to run
  the reconciliation wizard again in order to reconcile the account.
</para>

<para>
  If you do click <guilabel>Postpone</guilabel>, the next time you run the
  reconciliation wizard on this account, &kmymoney; remembers the values you entered
  when you previously ran the wizard, and you will be able to change them, if
  necessary.  In this case, the initial screen of the wizard is different, to remind
  you of this.
</para>

<screenshot>
  <screeninfo>reconciliation wizard finish</screeninfo>
  <mediaobject>
    <imageobject>
      <imagedata fileref="reconcile-redo.png" format="PNG" />
    </imageobject>
    <textobject>
      <phrase>reconciliation; wizard finish</phrase>
    </textobject>
  </mediaobject>
</screenshot>
</sect3>
</sect2>
</sect1>
</chapter>
