Navigating the world of property management accounting requires a keen understanding of various financial metrics and balances. One such crucial metric is the Adjusted Cash Balance in AppFolio. This balance represents the funds in your General Ledger (GL) Cash Account, adjusted to account for transactions recorded in AppFolio that haven’t cleared your bank yet. In this comprehensive guide, we’ll explore deeper into what constitutes the Adjusted Cash Balance, why it’s important, and how to ensure it aligns with your Ending Statement Balance during bank reconciliation.
What is Adjusted Cash Balance?
Cash Balance is the sum of funds in your GL Cash Account, adjusted for specific transactions that have been recorded in AppFolio but haven’t cleared your bank. These transactions typically include:
Deposits in Transit: Deposits you’ve made in AppFolio that have yet to clear your bank.
Outstanding Checks: Checks you’ve written in AppFolio that are still pending clearance from your bank. Ideally, your Adjusted Cash Balance in AppFolio should align perfectly with your Ending Statement Balance at the conclusion of your bank reconciliation process.
Key Considerations for Adjusted Cash Balance
While AppFolio automatically adjusts your cash on hand to reflect in your GL Cash Account, it’s essential to understand that certain items won’t be accounted for in the Adjusted Cash Balance unless manually entered. These include bank fees, charges, and credits that haven’t been recorded in AppFolio.
Factors Influencing Cash Balance
Understanding the various factors affecting your cash balance can help ensure accuracy and streamline your bank reconciliation process. Here are some key factors to consider:
-Beginning Statement Balance: This should mirror the ending statement balance from your previous reconciliation.
-Statement Date: This date reflects the close of your statement period. Transactions occurring outside this period won’t be included in the Adjusted Cash Balance.
-Ending Statement Balance: This is the final balance provided on your bank statement, serving as a benchmark for your Adjusted Cash Balance.
Calculator Items: These show the total of cleared Deposits and Payments, their combined ending amount, and any discrepancies in the amount.
-Adjusted Cash Balance: The Adjusted Cash Balance represents the funds in your GL Cash Account, adjusted for transactions yet to clear your bank. This balance should ideally match your Ending Statement Balance.
Troubleshooting Adjusted Cash Balance in AppFolio
If you find that your Adjusted Cash Balance doesn’t match your Ending Statement Balance, it’s essential to identify and resolve the discrepancies promptly. Here’s a detailed troubleshooting guide to help you address common causes of discrepancies and their solutions:
- Undeposited Receipts in AppFolio
Issue: All Receipted Items Not Deposited
Solution: If you’ve receipted funds in AppFolio but haven’t deposited them using the ‘Make Bank Deposit’ feature, it could lead to discrepancies. Deposit these funds in AppFolio with the appropriate historical date to align with your bank statement.
- Mismatched Receipt and Deposit Dates
Issue: Receipt Dates and Deposit Dates Not Matching
Solution: If the receipt date doesn’t match the deposit date, and the difference means the receipt date precedes the statement date, it may cause discrepancies. AppFolio flags these items in the ‘Transaction Warnings’ section. Adjust the receipt date to match the deposit date to resolve this issue.
- Incorrect Beginning Balance in AppFolio
Issue: Beginning Balance Not Correct
Solution: If your original beginning balance in AppFolio was inaccurate due to past uncleared transactions, it may lead to discrepancies. Run your General Ledger report and set the start date to your earliest transactions in AppFolio. Verify and correct the beginning balance amounts to align with your bank statement.
- Uncleared Checks from Previous Systems
Issue: Uncleared Checks or Deposits from a Previous Product Not Entered correctly.
Solution: If you have uncleared transactions from your previous system when switching to AppFolio, we also need to ensure those are entered properly. We’ll soon create a workaround guide to account for those transactions in AppFolio.
Whenever in doubt, you can reach out to an AppFolio accounting expert to help you set the foundations for clean and accurate bookkeeping. If you have questions about this topic, do not hesitate to Contact Us.