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Reconcile

Balance Reconciliation

The Reconcile feature helps you adjust your Cognito Money balance to match your actual bank account balance.

What is Balance Reconciliation?

Balance reconciliation is the process of comparing your Cognito Money's total balance with your actual bank account balance and making adjustments to ensure they match. This important practice helps:

  • Correct discrepancies between recorded and actual balances
  • Account for transactions you might have missed
  • Ensure your financial data is accurate
  • Maintain the integrity of your budgets and financial reports
  • Prevent financial planning based on incorrect information
When to Reconcile

It's recommended to reconcile your balance:

  • At least once a month when you receive your bank statements
  • Before making major financial decisions
  • When you notice discrepancies in your account balance
  • After importing transactions from external sources
Tip:

Regular reconciliation is a cornerstone of good financial management. Set a monthly reminder to reconcile shortly after receiving your bank statement.

The Simple Reconciliation Process

Cognito Money's reconciliation process is straightforward:

  1. The app shows you the current total balance (all income minus all expenses ever recorded)
  2. You enter your actual bank account balance
  3. The app calculates the difference between these two balances
  4. An adjustment transaction is created to account for this difference
Types of Adjustments

Depending on the difference between your app balance and actual balance:

  • Positive Adjustment: If your actual balance is higher than the app balance, an income adjustment is created
  • Negative Adjustment: If your actual balance is lower than the app balance, an expense adjustment is created
  • No Adjustment: If the balances already match, no adjustment is needed
Understanding Balance Calculation

Cognito Money shows you the following during reconciliation:

  • Current App Balance: The total of all income minus all expenses ever recorded in the app
  • Actual Bank Balance: The balance you enter from your bank account
  • Adjustment Preview: A preview of the adjustment that will be made

The app will automatically calculate the adjustment needed to make your balances match exactly.

Step-by-Step Guide

To reconcile your balance:

  1. Access the Reconcile page using one of two methods:
    • From the main menu: Select More > Reconcile
    • From the Transactions page: Click on the Reconcile tab
  2. Review your current app balance (automatically displayed)
  3. Enter your actual bank balance in the provided field
  4. Review the adjustment preview that appears
  5. Add an optional description for the adjustment (e.g., "Monthly reconciliation")
  6. Click Reconcile Balance to create the adjustment
The Adjustment Transaction

When you complete reconciliation, Cognito Money automatically:

  • Creates a new transaction in the "Adjustments" category (creating this category if it doesn't exist)
  • Sets the amount to the difference between your app and actual balances
  • Adds the description you provided, prefixed with "Adjustment (increase)" or "Adjustment (decrease)"
  • Tags the transaction with "adjustment" and "reconciliation" tags
  • Includes notes with details about the starting and ending balances
Note:

The adjustment transaction can be viewed later in your transaction history like any other transaction.

When Your Actual Balance is Higher

If your bank balance is higher than your app balance, this could be due to:

  • Income you received but didn't record in the app
  • Interest earned on your account
  • Refunds or returns that weren't recorded
  • Expenses recorded in the app that haven't actually been paid yet

The reconciliation will create an income adjustment to increase your app balance to match reality.

When Your Actual Balance is Lower

If your bank balance is lower than your app balance, this could be due to:

  • Expenses you made but didn't record in the app
  • Bank fees or service charges
  • Automatic payments or withdrawals
  • Income recorded in the app that hasn't actually been received yet

The reconciliation will create an expense adjustment to decrease your app balance to match reality.

When Your Balances Already Match

If your app balance already matches your actual balance:

  • No adjustment transaction will be created
  • A confirmation message will be displayed
  • You can continue using the app with confidence in your balance accuracy
Good Practice:

If your balances match exactly without needing adjustment, it means you've been diligently recording all your transactions!

Tips for Effective Balance Reconciliation
  • Reconcile regularly - Monthly reconciliation helps catch errors early
  • Check for pending transactions - Note any transactions that haven't cleared yet
  • Use descriptive adjustment notes - Add details that will help you remember why an adjustment was made
  • Investigate large discrepancies - Try to identify specific missing transactions before creating a large adjustment
  • Update your records first - If you know what's causing the discrepancy, add those transactions before reconciling
  • Verify the adjustment - After reconciling, check that your app balance now matches your actual balance
Common Causes of Discrepancies
Discrepancy Common Cause
Small positive amounts Interest payments or small refunds
Small negative amounts Bank fees or service charges
Large discrepancies Major transactions not recorded (bill payments, deposits, etc.)
Recurring discrepancies Automatic payments or subscriptions not tracked in the app
Gradually increasing discrepancies Consistent small transactions being missed (coffee purchases, small fees)
Pro Tip:

If you find yourself making frequent or large adjustments, consider reviewing your transaction entry habits to identify what might be causing the ongoing discrepancies.

Common Issues and Solutions

If there's a large difference between your app and actual balances:

  1. Review your recent bank transactions for any major items not recorded in the app
  2. Check for duplicate transactions that might be inflating your app balance
  3. Verify that all transfers between accounts are properly recorded
  4. Look for mistakes in transaction amounts (e.g., wrong decimal placement)
  5. Consider adding missing transactions directly rather than using a single large adjustment

If the adjustment preview doesn't show what you expected:

  • Double-check that you've entered the correct actual balance
  • Ensure you're comparing with the same account (checking vs. savings)
  • Verify that the app balance shown includes all transactions
  • Check if any recent transactions might not be reflected yet

If you made a mistake during reconciliation:

  1. Go to your transaction history
  2. Find the adjustment transaction (it will be tagged with "adjustment" and "reconciliation")
  3. Delete this transaction to reverse the adjustment
  4. Return to the reconciliation page to perform a new, correct reconciliation

If you find yourself needing frequent adjustments of similar amounts:

  1. Look for patterns in your bank statement (monthly fees, interest payments)
  2. Consider setting up recurring transactions in the app to account for these regular items
  3. Use the transaction tags to track commonly missed items
  4. Review your financial habits to identify transactions you might be consistently forgetting to record
Need more help?

If you're still having trouble with reconciliation, check your transaction history for accuracy or contact support for personalized assistance.