cash account reconciliation differences

[randomfive]

I very regularly get cash account reconciliation differences.

E.g. in a small UTMA account at Vanguard with only $3k in it, I have a variance of $2.6k in the Federal Money Market Fund balance. There's probably been 5 transactions into and out of that money market fund.

Is there something I am supposed to be doing to prevent this from ocurring?

What's the best way for me to resolve?

Thanks!

[Mark]

Hi randomfive,

You want to make sure you have all the transactions recorded as they happened. Reconciling cash is like reconciling anything else. Cash is a bit different in that you want to keep all transactions at a price of 1, and the value equals the shares. However, the number of shares owned works just like any other investment, in that the balance is simply the sum of all prior recorded transactions. See our tutorial on reconciling, and our tutorial on tracking cash.

[randomfive]

Thanks for your response!

I watched the video and as far as I can determine I'm following all the instructions already and have the check boxes selected as per the screen image.

I'm attaching here the transactions in my basic UTMA account that has little activity and has not been open that long. All the lines I've highlighted need to be deleted in order to equal the correct balance.

Do you have any suggestions for how these transactions were generated, all but one being a duplicate?

Thanks!

[Mark]

Hi randomfive,

It looks like you are using this money fund investment as a default cash account, but your broker is also reporting these money fund transactions specifically. In this case you are double recording transactions in the money fund. So, either don't use the default cash account feature, or use a separate cash investment from your money market as a sweep cash account. Take the example where you bought something for $895 on 10/30.

You can either record it without a default cash account like this:

10/30 Buy ETF for $895
11/3 Sell Money Fund for $895

Or, if you use a sweep cash investment (a separate investment from your money fund that will end up having 0 shares once things settle), record:

10/30 Buy ETF for $895
10/30 Sell Sweep Cash for $895
11/3 Sell Money Fund for $895
11/3 Buy Sweep Cash for $895

Notice, the "Sweep Cash" will end up with 0 shares.

[randomfive]

Thank you for solving my problem, and for responding so rapidly. Much appreciated! I am choosing to turn off the default cash reporting.