Appendix M - Escrow Bank Account Starting Balances

Establish Your Method

There are basically 2 methods to consider when establishing your escrow account starting balances.

Method 1 – I prefer to enter the entire detail history for each property containing an escrow balance.

Method 2 – I prefer to enter just balances for each property and don’t want to enter the entire detail history for each property.

Because an escrow bank account is made up of balances by property, it is important to understand that you cannot simply make a beginning balance entry like you would for an operating bank account.  You MUST build your detail balance property by property, transaction by transaction.

Method 1 – I prefer to enter the entire detail history for each property containing an escrow balance.

Requirement:

1. All properties with an escrow balance must be entered in Pro Gold XP.
2. Escrow bank account setup in Pro Gold XP
3. Your existing system is balanced with your last bank statement to a $0.00 difference.

Determining What You Already Have

1. Determine a date to work from (end of a bank period typically).
2. From your existing system determine the bank account balance.
3. From your existing system determine the balance for each property.
4. From your existing system determine the detail of each check and deposits for each property containing a balance.  Include any funds that the company may have in this account and classify it as the “Master Account”.
5. Validate your bank account balance is equal to the total balance of all properties balance including your master account.
6. Did you reconcile your bank account statement to your existing system to have a $0.00 dollar difference? 
1. If yes you will be able to reconcile in Pro Gold XP.
2. If no you will not be able to reconcile in Pro Gold XP and will have to either balance your existing system or enter an adjustment to your master account.

Duplicating What You Already Have In To Pro Gold XP

1. From Pro Gold XP, under Properties menu select Work with Properties; find a property that has an escrow balance.  Enter each check and deposit that makes up the balance for that property in the Escrow form using the open escrow checkbook button.  Repeat this process for each property.  Print an Escrow Account Balance report from Banking Reports as needed to verify your work.  Enter any company funds in the Pro Gold XP Master Account (PID 1).
2. From Pro Gold XP print an Escrow Balance Report to verify that all property balance matches your existing system from step 2.

Reconciling Your Work

1. From your last bank statement, enter banking fees (if any) in Pro Gold XP as banking adjustments to the Master Account PID 1.
2. From the Banking menu select Bank Reconciliation and create an initial bank reconciliation period.  Enter the period start date to a date that precedes any banking transaction date.  Enter the period end date to your last bank statement ending date.
3. Enter your statement ending balance from your last bank account statement in the ending statement balance field where provided.
4. ONLY clear transactions that have cleared prior to your last bank statement.  Include all transactions in your last bank statement.
5. When you have cleared your transactions your unresolved difference should be $0.00 - you have successfully balanced your escrow account.  If for some reason that you do not reach an unresolved difference of $0.00 you will need to go back and re-check your work.
6. Lock the period so that items cannot be changed.
7. Maintain future escrow banking transactions in Pro Gold XP and reconcile with your bank statement monthly.

Method 2 – I prefer to enter just balances for each property and don’t want to enter the entire detail history for each property.

Because an escrow bank account is made up of balances by property, it is important to understand that you cannot simply make a beginning balance entry like you would for an operating bank account.  You MUST build your detail balance property by property, transaction by transaction.

Requirement:

1. All properties with an escrow balance or an outstanding transaction are entered in Pro Gold XP
2. Escrow bank account setup in Pro Gold XP
3. Your existing system is balanced with your last bank statement to a $0.00 difference

Determine Existing on-hand balances

1. Establish a target date (ideally the end of a bank statement period).
2. Verify the on-hand balance for each property as of the target date.
3. Enter one deposit for each property with the on-hand balance amount using the target date as the transaction date.  Enter the deposit from the escrow menu from Work With Properties.    Use the Master Account (PID 1) property for any funds that the company may have in this bank account.
4. From the banking report menu, print the Escrow Account Balance Report with the target date as to date and verify the total for each property in Pro Gold XP.

Enter Outstanding Transactions

1. Reconcile the target date to your bank statement in your existing system.
2. Develop a list of all outstanding check and deposits that have not cleared the bank. 
3. Enter all these outstanding transactions with the target date as the date deposited and date received. Each outstanding check entered will require a corresponding deposit entry. 
4. Verify all outstanding transactions have been entered (Both deposits and checks) by printing the Escrow Account Journal for each property with an escrow account balance.

Reconcile Your Work

1. From the Banking Tab select Bank Reconciliation and select the Escrow bank account.
2. Create an initial bank reconciliation period by entering the start date.  Start date must be 30 days from the target date (e.g., 07/01/2005 for target date of 07/31/2005). 
3. Click New Period button.
4. Enter your statement ending balance from the target bank account statement in the red Ending Statement Balance field.
5. Clear all deposit transactions with a date as of the target date except any entered as an outstanding deposit only transaction.
6. When you have cleared the appropriate deposit transactions your unresolved difference should be $0.00.  If so, you have successfully balanced your escrow account.  If for some reason your unresolved difference is not $0.00, you will need to go back and re-check your work.
7. Lock the period so that items cannot be changed.
8. Click print button and print the statement of account to verify that you balanced the account.
9. Maintain future escrow banking transactions in Pro Gold and reconcile with your bank statement month