Discussion:Banking by Computer Question
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Death&Taxes (talk|edits) said: | 17 January 2008 |
| Doing our second write up. Client has checkbook but also uses the bank's pay by computer type line to disburse checks to certain creditors. Client dates the check 1/2/08 but apparently posts it 12/31/07 and it is deducted from his account on that date. Which year do you deduct the expense? This is not a class problem....I am looking at it now. | |
| 17 January 2008 | |
| Are you sure they're deducting it or just reducing available funds balance? Anyway, I haven't fiddled with this with my banks yet, but on the online payment screens, you specify a delivery date and there's a footnote there as to how many days to lag behind that date to do your screen input (like 5 days). If my bank fully deducted it (available balance reduction we can't argue with) and "sat on the money" to their investment benefit, I would have words with the 800# number person. Wouldn't win, but venting is good for the psyche.
Has IRS said anything yet? Seems that doing it online is same as dropping in the mail yourself. The inevitable will happen. | |
| 17 January 2008 | |
| D&T.
I would agree with JR1. However, I have a similar situation with my clients using paycycle. Payroll is removed from the clients account 2 days before the payday. So what is really the payday. The two days before or the day the employees receive the funds. In this case I use the paydate which is the later of the two because that's when paycycle records the pay on the payroll returns. It creates a timing difference almost every month on the bank rec. | |
Death&Taxes (talk|edits) said: | 17 January 2008 |
| I have a copy of the 'check' and the right-side numbers are filled in on the magnetic ink portion, meaning it was cashed, and on the bank statement it is debited 12/31/07....yet clear as day, the date of the check is 1/2/08.
These idiots only keep their checkbook for those checks they actually write. I asked where did they keep their bank balance so the writer would know how much money there was. "You gave to go online to see that." This was a $1,200 check that in reality is a payment for what is probably inventory anyway....but being away from 'real accounting' for so long made me curious. | |
| 17 January 2008 | |
| I say the 12/31 day is equivalent to the day you write the check and stick it in the mail.
therefore I would count the check on 12/31/07. Afterall, on 12/31 the bank reduces the pending payment from your available funds. Therefore the fudns are no longer available for your use. My only exception to this is for my payroll service which i described above. | |
| 17 January 2008 | |
| That's interesting. They get good use of that money; no wonder one of my banks was begging to do online bill pay. I'm gonna try it once to see what National City does. | |
| 17 January 2008 | |
| David, Sounds like a CPA exam question. Are you studying for the CPA exam during tax season?? Aunt Emma gonna spank ya! | |
Death&Taxes (talk|edits) said: | 17 January 2008 |
| As I said, this is the first write up I have taken on in years. Banks used to break their statement down by deposits and checks: now we have deposits, ATM Deposits, ACH deposits, Other deposits, Checks, Substitute Checks, Credit Card Purchases, ACH Deductions and the good old Service Fees. Other additions seem to be deposits of credit card funds from customers. This is PNC Bank. | |
| 17 January 2008 | |
| I personally would include them in 07 for similar reasons as above. I would say that either way you should be OK. You are not double dipping the expenses and as long as you are consistent from year to year I think you could make an argument upon audit. | |
| January 18, 2008 | |
| I would record it in 2007 since that's the date it was deducted from the bank balance. Check dates really don't matter that much, which is why it is no longer recommended to post date checks -- they can be cleared at any time.
Hadlin, I hadn't really thought about the PR issue before. I think that's how all of the major PR services work -- they want to make sure funds are in their hands before they disburse them. For one of my clients, pay date is 15th and last date of the month, which is probably why I never considered the timing issue before. Perhaps the proper treatment is credit cash and debit some asset account (agent trust account?) on the date of withdrawal and then credit that asset account on the actual payday. | |
