What fundamental personal finance software concept am I missing?

Factual Questions
1

Hello,

I’ve been using various incarnations of MS Money and Quicken for about six years now off and on. One of the reasons I am not religious about it is because of something I just never bothered to learn about them. They all seemingly have one flaw (read: I seemingly am being stupid about something) that makes using them a pain in the ass. Specifically, I usually set them up to download all my account information automatically. Now, currently I’m using Quicken 2007, and I’m still not grasping how to handle transfers, CC payments, etc.

Now say I have a checking and a savings account, and I transfer $50 from C to S. If I were entering transactions by hand, I’d just add a transfer transaction to C and it would show up in C as a payment sent and in S as payment received - one transaction. Now, when Quicken 2007 downloads transactions automatically from my banks, it doesn’t automatically detect transfers (nor can I blame it for this), but I wind up with two transactions, a payment sent in C and a payment received in S. If I mark either as a transfer it would ALSO show up in the other account, so there’s a balance problem. Now, it seems this should be as easy as pie: Select two transactions in the same register that have the same amount, and declare “these are actually the same single transaction” and have them unified, but this feature doesn’t seem to exist. (Why do all of my software problems seem to boil down to the same issue? :))
Ok, I know jack shit about accounting, so I’m probably using wrong terms for everything, so just to be clear as to what my problem is, here’s a clearer explanation.

What I want:

[Checking: -$50] <----> [Savings: $50] (single linked transaction showing up in two accounts)

What I get:

After Downloading
[Checking: -$50], [Savings: $50] (Two independent transactions)

After I categorize them as transfers:
[Checking: -$50] <—> [Savings: $50] (The Savings downloaded transaction showing up in both accounts)
[Checking: -$50] <—> [Savings: $50] (The Checking downloaded transaction showing up in both accounts)

Of course I can just DELETE one of them but that’s somewhat like information loss, because each has an important date on it. The first when the payment was sent, the second when the payment was deposited into the other account. If I delete one or the other it would look instantaneous and can screw up some transaction orders.

So any ideas?

Thanks,

Groman

2

I am using Quicken as well, and have for many years. When I make a transfer, I enter it manually as a transfer. Then when I do my downloads, Quicken suggests a match to the entry I made manually. I click Accept and it’s done, just like you want.

This is very little trouble if you don’t do many transfers. I have one transfer that is set up as a scheduled transaction, so that one is zero effort, happens automatically. I also pay my credit card that way, so that’s one a month. I probably do one or two other *ad hoc * transfers a month. Not much effort.

I know of no nice way to do this just using the downloads without doing anything manually.

(Actually you could heap *piles * of blame on Intuit for failing to implement this basic functionality after so long. The banks certainly know that it was a transfer and could easily provide the information that would allow the software to link the two transactions.)

3

I don’t get automatic downloads from our bank, so they all come from the credit card company. Usually I’ve already recorded the transfer using Quicken, and the download/accept process finds the match.

As an alternative: Do your download. Go into one of the two accounts. See the new transaction ready to be accepted. Edit that transaction to turn it from a simple payment, to a transfer to the other account. Accept. Then when you go into the second account to accept its side of the transactions, it should find the one you accepted a minute earlier, and match its ‘new’ transaction to that.

4

After struggling with several Quicken versions over this, I’ve concluded the manufacturer misunderstands something about transfers. Whenever I call something a transfer, it only appears in one account, but if I then enter it into the other account, it creates a duplicate in the first account, so there are always an odd number of them. I can’t delete an odd number of them, so there’s no way to get them even (other than going back down to zero of them).

I just enter them as two separate transactions and select a category other than transfer.

5

[QUOTE=Napier]
After struggling with several Quicken versions over this, I’ve concluded the manufacturer misunderstands something about transfers. Whenever I call something a transfer, it only appears in one account, but if I then enter it into the other account, it creates a duplicate in the first account, so there are always an odd number of them. I can’t delete an odd number of them, so there’s no way to get them even (other than going back down to zero of them).

[/QUOTE]

I’ve never encountered anything like you describe and I’ve been using Quicken for 7 years (also through several versions).

When you enter the transfer in account A, what do you put as the category? The word “Txfr” by itself in the first column (check number/txn type?) doesn’t by itself do the trick, you have to put “[Account B]” (whatever the other account is) in the category. Then, when you save, and go to the Account B register, you should see that transaction already visible - with a category of “[Account A]”. I may be missing or misreading your post entirely of course.

6

[QUOTE=Mama Zappa]
I’ve never encountered anything like you describe and I’ve been using Quicken for 7 years (also through several versions).

When you enter the transfer in account A, what do you put as the category? The word “Txfr” by itself in the first column (check number/txn type?) doesn’t by itself do the trick, you have to put “[Account B]” (whatever the other account is) in the category. Then, when you save, and go to the Account B register, you should see that transaction already visible - with a category of “[Account A]”. I may be missing or misreading your post entirely of course.
[/QUOTE]

Likewise. For the category, you just use the [AccountName] which shows up in the category list. Viola… it’s a debit from account A, a deposit to account B, and if you change the amount in one place, it’s changed in both places.

7

It sounds to me like you are relying on your downloaded transactions to populate your account register. I.e., you are not manually entering your transactions.

Quicken and MS Money both seem to work best if you enter all of your transactions manually (or via automatic bills/deposits) and then use the downloaded transactions to reconcile your account. Then you should be able to match two transactions to your manually entered transfer.

Personally I find no value in downloading transactions. I have automatic transactions setup for all of my household expenses in MS Money and all I need to do is check the account balance once a week and then resolve any discrepencies, normally there aren’t any.

8

[QUOTE=1920s Style “Death Ray”]
It sounds to me like you are relying on your downloaded transactions to populate your account register. I.e., you are not manually entering your transactions.

[/QUOTE]

I practically do not use cash. If I’m going to spend my time typing in every $3 debit card coffee and gum purchase exactly hoping it will match up with the bank transaction it would defeat my entire purpose for Quicken. I mean, I might as well type them into a spreadsheet and have a lot more control over everything. I know a lot of people use planning/budgeting/tax features of quicken, but for me it’s a transaction database… a way to automatically download transactions on every credit card, checking and savings account, and have quicken automatically assign categories to as many as it can. Periodically check the uncategorized list and categorize by hand. Generate reports, etc. I have automatic credit card payments, for example, and I’d like those categorized as transfers when they pop up one day on my checking account and in a day or two on the CC account.

9

[QUOTE=groman]
I practically do not use cash. If I’m going to spend my time typing in every $3 debit card coffee and gum purchase exactly hoping it will match up with the bank transaction it would defeat my entire purpose for Quicken.
[/QUOTE]

Well, I think that’s the problem. It’s not smart enough to know that an amount coming out of one account which matches the amount and date of a deposit in another account, is a transfer.

The way I get the best value out of the programs (I’ve used both) is to have a separate bank account for general spending. I throw $100/week into that account and I don’t bother tracking all the little $3 purchases I make. In fact I don’t track that account at all. Then my other account just has scheduled bills coming out of it and I track those.

But then my primary reason for using Quicken and MS Money is to make sure I always have enough money to pay my bills and to be able to use the cash flow forecast to see if I have any cash critical times approaching in the future. So I’m interested in dealing with scheduled transactions such as bills and not interested in monitoring everyday spending except as a lump sum. It sounds like your requirements for it are a bit different.

That’s all a long winded way of saying, “I can’t help you.” :).

10

[QUOTE=1920s Style “Death Ray”]
Quicken and MS Money both seem to work best if you enter all of your transactions manually (or via automatic bills/deposits) and then use the downloaded transactions to reconcile your account.
[/QUOTE]
Holy crap - what a lot of work. Doesn’t this mostly defeat the objective of using Quicken/Money in the first place? I just checked my main (but not only) bank account and my main (but not only) credit card and last month did a total of exactly 100 transactions between the two of them.

Anyway, as other posters have said, transfers can be handled easily by categorizing the first one that shows as [other account] and it will then automatically be matched when you download transactions in “other account”.

11

[QUOTE=1920s Style “Death Ray”]
Well, I think that’s the problem. It’s not smart enough to know that an amount coming out of one account which matches the amount and date of a deposit in another account, is a transfer.

[/QUOTE]

I don’t want anything to be smart. If you see the pit thread I linked in my OP, you’ll notice I had the same complaint with Outlook. The problem is that there is no manual way of doing the most obvious thing on the planet. Select two transactions and declare them one, by hand, this would suffice. But currently I have to do a lot of copy pasting and deleting and such.

12

[QUOTE=groman]
IThe problem is that there is no manual way of doing the most obvious thing on the planet. Select two transactions and declare them one, by hand, this would suffice. But currently I have to do a lot of copy pasting and deleting and such.
[/QUOTE]
No you don’t. Have you read the responses in this thread? Categorize the first as being a transfer to/from the other account and the second should match automatically. Even if it doesn’t, the most you would have to do is delete the duplicate. There is never any copying or pasting required.

13

[QUOTE=amarone]
No you don’t. Have you read the responses in this thread? Categorize the first as being a transfer to/from the other account and the second should match automatically. Even if it doesn’t, the most you would have to do is delete the duplicate. There is never any copying or pasting required.
[/QUOTE]

Let me see if I can put it another way.

The transactions I download are:

X - a debit from account A for amount B with line description C and date D
Y - a credit to account E for amount B with line description F and date G

Say I categorize either as a transfer (I’ve never had these match up automatically), then I get

X - a debit from account A for amount B with line description C and date D
Y - a credit to account E for amount B with line description F and date G
Z - a credit to account E for amount B with line description C and date D linked to X

or

X - a debit from account A for amount B with line description C and date D
Z - a debit from account A for amount B with line description F and date G linked to Y
Y - a credit to account E for amount B with line description F and date G

Now if I delete the extra transaction that isn’t linked, I lose the information contained therein (line description/date). Even if I manually combine this information by copy pasting it’s still going to be on the wrong date on one of the accounts.

14

Your transfers get credited on a different day?

15

[QUOTE=1920s Style “Death Ray”]
Your transfers get credited on a different day?
[/QUOTE]

Well, not within the same bank, but if I use bill pay to pay a credit card, the bank prints a check and debits my account, mails the check, the credit card bank deposits the check and credits my account there. From my point of view that is a transfer from one account to another of a different type.

16

What is it, 1970 over there?

As far as I know, there is no way in Quicken or Money to have a transfer appear on different dates in the respective accounts. Technically you don’t have a funds transfer, you have a credit card bill payment. I think you need to use two transactions.

What is the problem with just not classifying it as a transfer? Then you would download your transactions and get:

X - a debit from account A for amount B with line description C and date D
Y - a credit to account E for amount B with line description F and date G

And this is what you want isn’t it? Why do you want to classify it as a transfer?

17

[QUOTE=1920s Style “Death Ray”]

What is the problem with just not classifying it as a transfer? Then you would download your transactions and get:

[/QUOTE]

That’s what I’ve been doing so far and while there isn’t anything ‘wrong’ with it, it’s just incredibly annoying to me – I mentally classify transactions into four categories

  • Payment
  • Transfer
  • Income
  • Reimbursement
    I guess I could start thinking that every time I pay a credit card, I’m actually paying for something, and then getting reimbursed for the same amount on the credit card account when it posts. But then on the day I just paid all my bills (the day I’m most likely working with quicken the most) every report Quicken does and everything will show not account for the fact that the bills that were credit cards did not affect the total amount of money I have because they reduce cash but also reduce liability in a couple of days. There’s no problem with this, I’m not retarded, I understand that there’s no practical difference, but it’s one of those insanely annoying things that financial software in the year 2007 cannot handle the concept of a transfer out and transfer in. What if I mail myself a check? :slight_smile:
18

[QUOTE=groman]
Let me see if I can put it another way.

The transactions I download are:

X - a debit from account A for amount B with line description C and date D
Y - a credit to account E for amount B with line description F and date G

Say I categorize either as a transfer (I’ve never had these match up automatically), then I get

X - a debit from account A for amount B with line description C and date D
Y - a credit to account E for amount B with line description F and date G
Z - a credit to account E for amount B with line description C and date D linked to X

or

X - a debit from account A for amount B with line description C and date D
Z - a debit from account A for amount B with line description F and date G linked to Y
Y - a credit to account E for amount B with line description F and date G

Now if I delete the extra transaction that isn’t linked, I lose the information contained therein (line description/date). Even if I manually combine this information by copy pasting it’s still going to be on the wrong date on one of the accounts.
[/QUOTE]
I understand your situation now, but cannot see why you want to do what you say. If the transfer is essentially the same transaction showing in two places, why would you want it to have a different description in each?

I can understand a little more why you might want different dates, as the transfer hits different accounts on different days. On the other hand, if you could record the transfer with different dates on each end, then you would get an incorrect net worth report during the period while the funds are in limbo. I am happy with the transfer with both ends showing the same date so that my money doesn’t “vanish” from the system for a couple of days.

If you are finicky about having each individual account exactly right to the day, then you can do the transfer via a fictitious third account. Let’s call it Temp. In your first X and Y example you can categorize X as a debit (transfer) from account A and credit Temp on date D. Then on date G you do a debit from Temp and credit account E.

Both transfers will retain the description and date that you download. You never need to delete, copy or paste anything. Your account balances are always correct and your net worth stays correct even while the money is in limbo.

While I do not use the above approach for transfers, I do use it when I want an expense or income transaction to be reported in one period even though the actual payment/income event occurred in another.

19

[QUOTE=amarone]
If you are finicky about having each individual account exactly right to the day, then you can do the transfer via a fictitious third account. Let’s call it Temp. In your first X and Y example you can categorize X as a debit (transfer) from account A and credit Temp on date D. Then on date G you do a debit from Temp and credit account E.

[/QUOTE]

Ok, that’s actually a really good solution. Thank you. It’s fairly easy to automate as well.

20

>I’ve never encountered anything like you describe… When you enter the transfer in account A, what do you put as the category?

Well, I’ll be damned! I was using categories the way I generally use them, describing the purpose of the transaction. I never noticed the accounts themselves appear as categories too. I started using Quicken 9 years ago - wonder if that’s how it was set up then, or if it’s a new feature I never noticed.
It makes me wonder, though, why the second entry I put in would get duplicated in the other account. What happens the second time I put one in, that doesn’t happen the first time, triggering Quicken to treat it as a transfer?