33 - How to Fix a Starting Balance

A starting balance is the amount M2 starts a ledger from, on the Starting Balance As Of date. Every bank account and every fund has one. Every balance after it builds on that number. If your local (the individual unit of your organization, such as a chapter or local committee) started with a wrong number, you may see:

• A negative starting balance.
• Red balances from the first rows of the ledger.
• A balance that never matched the bank, from day one.

Is it the starting balance, or something later?

Fix the starting balance only when the number was wrong from the start. If the ledger matched the bank at first and drifted later, leave the starting balance alone. A missing check or deposits that were never recorded call for an adjustment instead. See How to Start Using Multiple Bank Accounts, section "Line up your Operating Account with the bank."

Before you start

• You need local financial write access.
• Find the date of the first entry. In the account's ledger, it's the row right after Starting Balance.
• Get the bank's balance at the end of the day before that entry, from the statement's ending balance or its daily balance. Subtract checks written by then that hadn't cleared, and add deposits the bank hadn't posted yet.
• Write down the current starting balance and its date. M2 keeps no record of the old amount after you change it.

Fix the bank account

In this example, the Operating Account starts at -$27,094.14 and the correct amount is $8,500.00.

1. On your local's dashboard, click the Income & Expenses tab.
2. In the Bank Accounts card, click the account, such as Operating Account.
3. Click the pencil icon on the account's card. The Edit Bank Account window opens.
4. In Starting Balance, type the bank's balance from "Before you start."

5. Check Starting Balance As Of. It must be earlier than the first entry. The day before is best.

   

6. Click Update.

Every running balance and the current balance move by the same amount. Here the Current Balance went from $35,925.20 to $71,519.34.

Fix the fund

Your funds must add up to your bank accounts plus untransferred funds. After the bank account changes, Fund Reconciliation (in the Bank Accounts card menu) shows a difference. It equals the new amount minus the old one. Here, going from -$27,094.14 to $8,500.00 is a difference of $35,594.14.

Change the fund that holds that money by the same amount. For the Operating Account, that's usually General Fund.

1. On the Income & Expenses tab, click the fund in the Funds card.
2. Find the date of the fund's first entry, the row right after Starting Balance in its ledger.
3. Click the pencil icon on the fund's card. The Edit Fund window opens.
4. In Starting Balance, change the amount by the same difference. For example, if it shows $1,000.00 and the difference is $35,594.14, type $36,594.14. If the fund had the same wrong number as the account, as General Fund did here, type the same correct amount.
5. Keep Starting Balance As Of earlier than the fund's first entry.
6. Click Update.

Check your work

• The ledger starts where the bank did, with no red rows.
• Today's balance matches your latest statement, after uncleared checks and deposits.
• Fund Reconciliation shows a Difference of $0.00 and says "Everything is accounted for: the fund total equals the bank account total plus untransferred funds."

Note the change in your minutes or financial report: the old amount and date, the new amount, and why.

Troubleshooting

M2 changed the amount I typed. Your Starting Balance As Of date was on or after the first entry. M2 moved the date to the day before that entry and changed the amount, so the balance on your date equals what you typed. This is one way a starting balance ends up negative. Open the window again, type the bank's balance for the day before the first entry, and keep the date M2 set.

Fund Reconciliation shows a difference after the fix. The fund wasn't changed, or it changed by a different amount than the account. Compare the two starting balances, and check that M2 didn't change the amount you typed on the fund.

Today's balance no longer matches the bank. The starting balance wasn't the problem. Put the old amount and date back on both the account and the fund. Then record an adjustment, as shown in How to Start Using Multiple Bank Accounts.

Related guides

• How to Manage Bank Accounts
• How to Create and Manage Funds
• How to View a Bank Account Ledger
• How to Start Using Multiple Bank Accounts
• How to Reconcile Funds Against Bank Accounts