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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  • 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.

    Reply Like
      • WordTenor
      • A polymath, a pain in the ....
      • WordTenor
      • 8 mths 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
      • 8 mths ago
      • 2
      • 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 2
  • 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.

    Reply Like
      • JoeDid
      • Remember: It is To Laugh
      • Purple_rain
      • 8 mths ago
      • 1
      • Reported - view

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

      Reply Like 1
  • 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 ! :)

    Reply Like
  • 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.

    Reply Like
  • I would love to be able to change the default to cleared.

    I don't know how it is for everyone else, but maybe 1 in 100 transactions won't clear instantly for me (I'm based in Australia).

    Reply Like
      • lindsay_g
      • Beige_Banjo.3
      • 7 mths ago
      • 1
      • Reported - view

      Rosie SImilar here. Even international transfers clear immediately. I use my NBK app to send money back to the UK. Then my Halifax Bank app to check it arrived. It is literally there straight away. The modern world, eh? 😀

      Reply Like 1
      • Rosie
      • rosie
      • 7 mths ago
      • 1
      • Reported - view

      lindsay_g yes, look at us with our instant clearing, chip cards, and paywave :o

      Reply Like 1
  • You can clear every transaction in your account or all accounts in 3 clicks.  

    Reply Like 2
  • Hi Herman,

    Can you talk me through what the 3 clicks are?

    Would they also clear my scheduled transactions?

    Thanks :)

    Reply Like
      • Herman
      • herman
      • 7 mths ago
      • 1
      • Reported - view

      Rosie I guess it is four clicks depending on where you start.

      1. All accounts

      2. Select box to select all transactions

      3, edit menu

      4. Mark all cleared.

      I don't think it would clear scheduled transactions but I did not test that.

      Reply Like 1
      • Rosie
      • rosie
      • 7 mths ago
      • Reported - view

      Herman it clears scheduled transactions that are due that day. This doesn't work for me. I'll continue to manually clear transactions as they come in and hope for the option to default to cleared in future.

      Reply Like
  • I would also love this feature to be implemented, I need all transactions to be auto-cleared because I do most of my accounts manually. It's very tedious to keep doing the steps Herman mentioned for each newly inputted transaction (I input transactions daily.)

    Reply Like
    • Hi Orange Falcon ! Thanks for letting us know you'd like to see that as an option. 😀 Are you entering transactions on the go, or at the end of the day? If it's the latter, and those have already cleared your bank—you can choose to mark the transaction as cleared when you enter it by clicking the grey c, to make it green.

      When you have a moment, would you mind submitting a Feature Request for that? The form goes directly to our development team, so you can let them know what you’d like to see going forward. We can’t make any promises, but that puts it on our list of possibilities!

      Reply Like 1
      • Herman
      • herman
      • 2 mths ago
      • 1
      • Reported - view

      Orange Falcon The steps i listed are only to bulk clear.  It is only 1 click to clear a transaction as you are manually entering it. 

      Reply Like 1
  • Nicole Herman

    I'm entering my transactions on the fly, so since all my accounts are not linked this can be 4 or 5 times a day having to hit the cleared button.

    As a software developer and product manager myself I would suggest that the expected behavior would be to have that auto clear. I'm not sure there is a use case for manually entering a charge that you don't want to auto clear if it is a manual account (since it's unlinked anyway I'm not waiting for bank input on the account at all.)

    Note that 4 times a day is about 120 times a month, I've considered canceling my subscription because it's quite annoying. But I love the app too much!

    I'll submit a feature request now

    Reply Like
      • Herman
      • herman
      • 2 mths ago
      • 2
      • Reported - view

      Orange Falcon But cleared is to be used to reconcile your account and tell you it has actually cleared the bank.  The way you are wanting to use it  it seems you don't need it.  To each his own I guess.  If I was you and I didn't care if a transaction was really cleared or not I would use the 3 or 4 click bulk update whenever you want to reconcile.  Having it cleared when you enter doesn't give you any useful information. 

      Reply Like 2
      • adriana01
      • adriana01
      • 2 mths ago
      • 4
      • Reported - view

      Orange Falcon Most of my debit or credit card transactions take at least a day to show up at the bank, and it might take longer to clear over a weekend or holiday. Auto-clear on those accounts would make reconciling them almost impossible. It would be nice for cash transactions, I suppose, but generally for all accounts I just clear them as part of reconciliation. Since I enter everything manually as well, I use the time to make sure every transaction is entered properly before I clear it (I usually find at least one transaction with swapped digits or in the wrong account).

      Reply Like 4
      • monkeyhanger
      • No animals were harmed
      • monkeyhanger.1
      • 2 mths ago
      • 1
      • Reported - view

      Orange Falcon Do you mean auto-clear once the transaction imports from the bank?

      If you mean anything else, then the accountant in me, is screaming NO!

      Reply Like 1
  • Well I still think there’s a strong enough difference of opinion on this that it should be a user-selected option. Feature request (as optional only) submitted.

    Reply Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 2 mths ago
      • 1
      • Reported - view

      lindsay_g Except that Faness has said that YNAB is not interested in "toggled" features.

      Reply Like 1
      • lindsay_g
      • Beige_Banjo.3
      • 2 mths ago
      • 1
      • Reported - view

      Superbone they toggle the help button visibility... 😜

      Reply Like 1
      • adriana01
      • adriana01
      • 2 mths ago
      • 3
      • Reported - view

      lindsay_g I thought that was a Toolkit option. Does base YNAB now allow the help button to be turned off?

      Reply Like 3
      • lindsay_g
      • Beige_Banjo.3
      • 2 mths ago
      • Reported - view

      adriana01 Ah, no, you’re probably right, I have the toolkit.

      Reply Like
  • lindsay_g  indeed a user selected option would be awesome!

    Reply Like 1
    • Peter
    • Professional Designer, Web Developer
    • lasty
    • 2 mths ago
    • Reported - view

    I also live in the future (i.e. not the US) and all my manual transactions with my cards and Apple Pay clear near-instantly. For anything that's not cash I usually get the push notification from my bank before the terminal at the cash register knows the transaction went through. In most cases I enter the amount from the bank's app where it has already cleared while I walk to the next store so I don't have to hang onto the receipt. It's also the reason I never use credit cards but only debit cards unless I absolutely have to.

    That being said I do recognize how important the cleared status is in other cases, like entering bills that get auto-deducted (direct debit). I'm currently waiting on my electricity bill from the start of the month to clear, because their billing seems to have developed some kind of a problem.

    Reply Like
  • I've been doing manual input with no import for 5 years (and longer going back to my MS Money days after it was sunset). I clear the transactions when I have verified that they have actually posted to my account and validated the amount entered. The purpose of this is to more easily avoid PEBKAC.

    I can see the auto-cleared being an option for a cash account since there's no first-party account register to verify against, but for other accounts, you should actually be doing the manual verification process against your account data on a regular basis (again assuming no import) or you are skipping a vital step in the whole purpose of the clearing/reconciling system.

    Reply Like 6
      • lindsay_g
      • Beige_Banjo.3
      • 2 mths ago
      • Reported - view

      nolesrule For cash transactions, absolutely. For bank payments, I usually am doing it against my bank statement.... all those automated standing orders and direct debits ( the huge majority of the number of transactions in my current account) I first become aware have been paid when I either see them on my phone banking app  or get a text from the bank (usually, because  it’s immediate).

      Around 90% of my transaction actions are verified cleared when I enter them into YNAB. The ones not cleared I can see as pending in the apps so I leave those pending in YNAB.

      this assumption that people clearing their transactions immediately are doing it ‘wrong ‘ is I think partly because banking in other countries is much faster and more automated than some YNAB users experience. Since starting to really think about all this, for example, I’ve noticed I can do an international transfer on my phone and see the money the same day... not even within Europe, I mean from the Middle East to the UK. But the point is, it’s all cleared.

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 2 mths ago
      • 5
      • Reported - view

      lindsay_g 

       No, the assumption is not wrong. Receiving transaction notification emails is not the same thing as an actual verification of the transaction. Those notifications are the equivalent of a secondary research source, not a primary source. Until you look at your account register, verify the transaction and the amount in the register and see that it has cleared, then for all intents and purposes, it has not cleared. You are just assuming it has cleared.

      And for the recurring transactions, you should be taking advantage of YNAB's scheduled transactions to keep track of them.

      Even if you are manually entering in real time, that's not the time to clear the transactions. It should be at a separate time from the data entry to ensure better attention to detail. It's the equivalent of a second set of eyeballs with one pair of eyeballs.

      Nothing can ever go wrong with a system... until it does. Especially those involving humans. That's why transaction entry, transaction clearing, and account reconciliation should all be done separately.

      Reply Like 5
      • lindsay_g
      • Beige_Banjo.3
      • 2 mths ago
      • Reported - view

      nolesrule How can it be wrong to look at my account in the mobile app and see the transaction cleared and assume it’s cleared? When you say the register I really don’t know what you mean, if you don’t mean my account?

      And the transaction notifications are from the bank, telling me money has left my account. If I can’t trust the bank communication then how is checking with the bank going to help? 

      I realise tone sometimes gets lost in writing, so I just want to say, I’m not being facetious or arguing, I am genuinely asking .

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 2 mths ago
      • Reported - view

      lindsay_g I'll skip the more detailed point and go back to the basic point.

      My basic point is that transaction entry and verification for clearing are two distinct actions and should not be combined under the pretext of convenience. The main reason is that in the event you make a data entry error (transpose numbers, inflow vs. outflow, completely typo the amount) you'll spend much more time chasing down data entry errors when reconciling accounts because you didn't separate the verification process than it takes to manually clear the transaction using a separate verification step.

      Reply Like
      • lindsay_g
      • Beige_Banjo.3
      • 2 mths ago
      • Reported - view

      nolesrule The system that I find doesn't work at all is actually the recurring transactions feature! It is helpful to have that reminder in the window, but scheduled transactions don't leave my account on the predicted days, more often than not and I spend a lot of time changing dates to get rid of those annoying red buttons flashing at me.

      The entries I make manually are all cleared except for a very few. We may be using different vocabulary, but I'm quite sure we are talking about the same thing. I see in my bank account that money has gone to some supplier or other, it is cleared by definition, I enter it manually (following advice to be granular) and have to clear it.

      Reply Like
      • adriana01
      • adriana01
      • 2 mths ago
      • 1
      • Reported - view

      lindsay_g I enter everything when I know about it, which is before the bank does. Scheduled transactions are scheduled for the date I expect, & if that varies I might change it when reconciling, but not always. I enter other transactions when I make them at the store, or later that day. I check the bank account to reconcile, not to see what transactions to enter.

      Reply Like 1
      • Patzer
      • Retired at age 60. Thank you, YNAB!
      • Patzer
      • 2 mths ago
      • Reported - view

      lindsay_g How about changing your thinking, and just clearing as part of your reconciliation process?  Then you could select multiple transactions, right-click, and clear.  Get rid of the annoying extra step with data entry.

      In a similar vein, I typically want to do some record keeping external to YNAB with all my transactions.  My first thought was to flag all the transactions I entered in the app, then clear the flag when I'd done my record keeping.  But I couldn't set the default to flag a transaction, and it was annoying to have to take extra taps to flag it.

      Then I changed my thinking.  I accepted that app transactions would be unflagged, and defined a purple flag as a transaction that had all the external record keeping done.  So I do my thing, and set a flag instead of clearing it.

      Try thinking that way with cleared.  Instead of clearing as they come in, clear only when you reconcile.  You'll do a lot fewer taps/clicks with that type of workflow. 

      Disclosure:  I frequently check my YNAB credit card balances (all transactions manually entered) against the online accounts; but I only actually mark the transactions cleared when I reconcile to the statement once a month.  It's a lot less work to bulk clear a month's worth of transactions than to add the clearing step to my data entry process.

      Reply Like
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