Why is the default for transactions 'uncleared'?

Dan (actually at anyone, but this was going to be an answer to Dan in a different forum and I realised I should put it here)

I had a very confusing series of problems with transactions not matching up to the value of huge amounts....  I was being absolutely religious about entering transactions and had started off my carefully matching bank balances, and was only 7 weeks in, so how could it be so wrong, not just once, but a few times??

I solved it - it was to do with cleared and uncleared transactions.. because they don't get entered as cleared by default I was somehow missing things and then had reconciled to fix it and then spotted an old uncleared transaction, or updated something, and then another one wasn't cleared and I didn't see it and everything was out by hundreds so I reconciled to fix it and...  

Good grief.

I have **totally** fixed it now and it was ****totally***** me. So phew! YNAB is not broken and aargh! I am an idiot :)

 

On the other hand - wouldn't 'cleared' be a better default setting than 'uncleared'? Especially since we are encouraged to enter transactions immediately we make them?  Also, I update from my bank manually (not a USA customer and anyway, I tried importing from a file and it just made everything too smooth and automatic, I WANT to input manually) - which means all my bank transactions are cleared when I input them.

What is the thinking behind 'uncleared' as a default? Can I change that setting? If not, is that the kind of thing we can request via the 'request a feature' um, feature?

thanks very much :)

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    • WordTenor
    • And they say I'm a Francophile; at least they know I know where France is.
    • WordTenor
    • 2 wk ago
    • 2
    • Reported - view

    An uncleared transaction is one you have recorded, but your bank has not. The point of having cleared and uncleared status for a bank account is so that you can tell the difference between transactions which are pending, and those which the bank has confirmed. Any time you keep a record that is secondary to the official record, you have to have some way of matching the secondary record to the official record--in this case, the process of clearing transactions. 

    This is the same process as keeping a checkbook register--you go back and make sure that the checkbook register aligns with the bank statement, but the fact that something is recorded in your register does not mean that the bank has received the check. 

    So, no. Uncleared is exactly the default you want--it records the accurate status of the transaction when you enter it. You are aware of it, but the bank is not. When the bank confirms the transaction and actually transfers the money to the merchant, the transaction gets cleared; either manually, or by one of the two import processes. This is the backstop that keeps your record in YNAB in sync with the bank. 

    NB: if you are not using an import for your transactions, then when you reconcile, you have two steps. Step 1 is to confirm that all transactions cleared at the bank are marked cleared in YNAB. Step 2 is to compare the cleared balances. If you skip step 1, your balances will be out of whack, as you've found. 

    Reply Like 2
  • But it isn’t correct. I know what the terms mean, I am either copying transactions from my bank, so they are cleared. Or paying cash -usually - using money the bank is already missing because I took it out of the atm. 

     

    If if you think uncleared should obviously be the default and I think cleared should be, then shouldn’t it be a user-set option? Is my point. 

     

    By the way I get the impression you still use cheques in the States. Banks here stopped  issuing cheque books years ago. We are all online and contactless. Even card payments clear in 24 hours, online payments and transfers immediately. There isn’t a window of several days like we used to have with cheques. So to me ‘uncleared’ as a term is almost valueless.

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      • WordTenor
      • And they say I'm a Francophile; at least they know I know where France is.
      • WordTenor
      • 2 wk ago
      • 2
      • Reported - view

      lindsay_g  I definitely agree with you that U.S. banking is WAY behind the times. I travel often and enjoy the security and ease of using accounts outside the States. We've just barely managed to use a chip, much less chip and PIN, which I find incredibly obnoxious. And I hate checks (sic). 

      That being said, this is more an issue of how YNAB is supposed to be used than one of how banks work. You are meant, as the user, to be recording transactions as they happen, and then checking them against the bank, rather than using the bank's record to generate the transactions. If they clear fast, then they clear fast, but for that 24 hour period, they are still pending. I have never not had transactions pend, even outside the States. You always have the option of clearing the transaction as you enter it, so if you are choosing to use YNAB in a different manner and waiting to enter transactions until they have cleared, you can clear them when you enter them. You can also batch clear transactions in the web version of the app . 

      Which isn't to say you couldn't request this. I'm just providing some info on why this one is pretty unlikely to be taken up and you'll probably just be shouting into the void. I once was told a stat that something north of 90% of YNAB users are in the U.S., so it will likely always reflect the U.S. system first. 

      Reply Like 2
      • jenmas
      • jenmas
      • 2 wk ago
      • 1
      • Reported - view

      lindsay_g transactions in cash accounts do default to cleared when you enter them via the full web version when using your computer. They don't seem to do that when you are using the mobile app though.

      Reply Like 1
  • Thanks for starting the discussion lindsay_g . It's an interesting one. So as WordTenor describes, it's a matter of process as the uncleared simply means that you're entering it in your register and will go back to verify it actually posted at a later time. 

    It sounds like that's actually consistent with your non-US banking experience too. You said that transactions take 24 hours to post, so from the time you make the transaction at the store it's "pending" for 24 hours or so, which means it should remain uncleared. 

    Now, you also mentioned that transfers are almost instantaneous. It's also instantaneous in YNAB! While the transfer of money from one account to another happens immediately (affecting the working balance), you'll still want to clear it later when you reconcile - or just enter it in as cleared. :)

    And even if there was a universal toggle to set what was default, it appears you'd want it to default to cleared only on Transfers (instant), whereas on regular outflows you'll want it uncleared (~24hours clearing time). 

    But this is all great feedback. So I'll make sure our design team is aware of the discussion! Thank you.

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      • JoeDid
      • Remember: It is To Laugh
      • Purple_rain
      • 12 days ago
      • Reported - view

      Dan Automatically clearing transactions -- without an option to turn this feature off -- would be serious mistake.

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  • I didn't ask for automatically clearing them. I said it would be good to have the default as a user-set option.

     

    Here in Kuwait (I bank in Kuwait and the UK) we mostly use cash, and my debit purchases do clear from my bank account the same day. I had pizza delivered last night, it's right there in the mobile app, already cleared, yesterday.

    And for those of us manually importing banking transactions from our mobile apps and online statements, every transaction we see is cleared already by definition. (I can look ahead in my online statement and see pending transactions but I don't add them.)

     

    Many of my larger spends - salary to cleaner, paying the mechanic, car insurance (the car for that matter) are cash. I work in a private school and it's very common to see parents paying school fees with wads of cash that come to several thousand dinars (the fees in my school are about 16k dollars per year, and parents come in and *pay cash*).

     

    In the UK I'm fairly sure (but I'm not there just now and can't check) that debit card purchases go through on the same day. If not always at least often.

    I do still have a  cheque book ... I keep it in a drawer as a souvenir of the old days ! :)

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  • lindsay_g said:
    I didn't ask for automatically clearing them. I said it would be good to have the default as a user-set option.

     Yes, and I was agreeing with that: if it becomes implemented, it has to be an option that I can turn off.

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