Trying to reconcile your accounts in QBO? Reconciling is the process of matching transactions into QBO against your bank or credit card statements. A fundamental piece of good bookkeeping is routine account reconciliation, the process in which you match up your transactions in QuickBooks Online (QBO) with your bank statement and credit card statements. In addition to being every amount of fun as it sounds, it’s a really helpful process to make sure that your bank accounts match up with your accounting system, and you’re not at risk of overspending based on what’s actually in the bank. It’s a similar process to balancing your checkbook. Before you attempt to reconcile on your own, check out our step by step guide below!
WHY DO I NEED TO RECONCILE MY BANK ACCOUNTS?
We’ve already acknowledged that it’s important to make sure your bank and credit card accounts match up with what’s in QBO for spending reasons, and it’s not hard to imagine why. Say you go to make a big purchase—new laptops for your growing tech team—and your card is declined. The last report you reviewed showed enough credit available, but the data was incorrect.
Staying on top of your accounting by reconciling your accounts on a regular basis also helps protect you, as you’ll quickly know whether or not any fraudulent charges have been made using your bank or credit card information.
You want to be able to make the most informed decisions for your business, and having accurate, updated data will help you do that. Moreover, filing your annual business taxes will be much easier if you get in the habit of reconciling your accounts on a regular basis. After all, expert accountants and successful business owners know that the best time to start preparing for tax season is year-round.
WHEN SHOULD I RECONCILE MY ACCOUNTS IN QUICKBOOKS?
The best approach to reconciling your bank accounts is to make it a monthly habit as soon as you receive your bank statements. The advantage to that is if anything is off and you need to make a correction, you can do it quickly to prevent any other issues from arising.
HELPFUL TERMS FOR ACCOUNT RECONCILIATION
You’ll want to know exactly what we’re talking about here, so it’s helpful to familiarize yourself with a few key terms.
- Beginning balance — the amount of funds (available in your bank account or owed for credit card accounts) at the opening of a new month or financial period
- Beginning date — the date a new financial period/statement month begins
- Ending balance — the amount of funds (available in your bank account or owed for credit card accounts) at the end of a month or financial period
- Ending date — the last date of the previous financial period/statement month
HOW DO I RECONCILE MY ACCOUNTS IN QUICKBOOKS?
It’s pretty easy, and here’s how to do it. Note: these steps are written out under the assumption that your bank and credit card accounts are already connected to QBO. If you need help connecting your accounts, here’s a step-by-step guide.
- You’ll need important information that’s found on your bank statement, so make sure you have it handy for the account you’re reconciling.
- Go to your navigation bar and select the Accounting tab. Then select one of your accounts to review before moving onto the others.
- You’ll be prompted to enter the ending balance and date in the boxes that appear. You can find these on your bank statements and you’ll want to enter them as they appear.
- Review each line of the account and make sure individual amounts and the aggregate totals match your bank statement.
- If everything is correct and matches up, you should see a $0 difference reported by your QBO account.
- Rinse and repeat for the rest of your connected accounts.
WHAT DO I DO IF MY ACCOUNTS DON’T MATCH WITH WHAT’S IN QBO?
If after you’ve completed your account reconciliation you still don’t have a $0 balance, don’t panic. Common causes for this are bank service charges, checks that haven’t cleared your bank yet but are already entered in QBO, deposits you’ve entered but haven’t cleared your bank yet, or transactions that posted to the bank but aren’t recorded in QuickBooks. These are all okay!
Not to sound like a guilt trip from mom, but this sort of discrepancy can be avoided by regularly reconciling your accounts—especially since it’s hard to recall transaction details if you’re looking back more than a few months!
Go one-by-one and review the transactions again. If you see a major difference, you’ve likely missed something. And if you’re still boggled by the discrepancy after doing your own research, reach out to your accountant for help.
Remember that transactions that have been reconciled in the past can be modified, deleted, or added, or your reconciliations can be adjusted depending on your financial situation. Either way, there’s no need to panic, because Intuit offers helpful articles on how to fix incorrect/zero beginning balances and dealing with reconciliation discrepancies.
Again, the main point about reconciling your accounts is to do it regularly. It might be helpful to set up monthly calendar reminders and block off time on your schedule to deal with your books. Surely, as you get more comfortable with the process, you’ll get faster at it and will eventually be able to complete the task in mere minutes, just like an accounting pro!
NEED HELP RECONCILING YOUR BOOKS?
While reconciling your accounts isn’t rocket science, it can take some time to get it all under control. If your situation leaves little to no time for you to manage your books the right way, then consider outsourcing your bookkeeping. The human-assisted automated bookkeeping offered by Botkeeper is the perfect solution for any startup or small business that’s strapped for cash and time. You can save up to 50% of the time and money it takes for a traditional bookkeeping solution, and with Botkeeper, your data is always accurate and available to you.
How to Reconcile in QuickBooks Online: Step-by-Step Instructions
How to Reconcile in QuickBooks Online: Step-by-Step Instructions
- Click on the Gear button, then on “Tools” and then “Reconcile.”
- Click on the drop-down menu under “Accounts” and select the account you want to reconcile.
- Enter the “Ending balance” and “Ending date” based on your bank statement information.
- Match transactions to your bank statement and check them off one by one.
- Apply filters so transactions are easier to find.
- Keep going until the “Difference” field is zero and you see the Success! page.
What Is Bank Reconciliation in QuickBooks Online?
Like in QuickBooks Desktop, bank reconciliation for your business accounting in QuickBooks Online is a separate event. It is its own module, exclusive from the chart of accounts, check register, and bank feed tools. Just because you have entered transactions into QBO using forms, the bank feed, or some third-party data fetching app, you still need to reconcile your bank accounts in QuickBooks.
Typically, you’ll be reconciling your checking, savings, and credit card accounts. Some might reconcile other current asset accounts and other liability accounts, even equity, but this article will focus on how to reconcile bank statements in QuickBooks Online.
Why and When Should You Reconcile in QuickBooks Online?
You should reconcile your bank accounts monthly, ideally around the same time you get your bank statement alert that it is available.
Why is that?
So QuickBooks Online matches what your bank or credit card institution says you have, says you spent, and says you earned. The ending balance of the prior month should match the beginning balance of the next month (even if just for a few seconds!). And your QuickBooks Online register balance at the end of the last month should certainly match the same on your bank statement.
Your accountant will likely be the one who actually does your bank reconciliations in QuickBooks Online. If the chart of accounts is a backbone of accounting and if the bank feed is a backbone tool of QuickBooks Online, then bank reconciliation is the monthly culmination of life inside of your financial data. Reports are important no doubt, but bank reconciliation is crucial to a healthier business existence. If your bank reconciliation is current and the balances all match, the file itself is 98% healthy.
Finally, this essential accounting task might be the very best barometer of how much time it is going to take your accountant to clean up your QBO file.
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How to Reconcile a Bank Statement in QuickBooks Online
Let’s walk through a step-by-step example of how to reconcile in QuickBooks Online.
Step 1: Navigate to the Reconcile Page
There are two ways to access the Reconcile module/page. You can click on “Accounting” in the side panel on the left, and then click on “Reconcile,” or, from the gear menu (A QuickBooks term referring to the gear icon), you can click on “Tools” and then “Reconcile.” Either option, will take you to the same place. See the first screenshot below.
Step 2: Select an Account to Reconcile
Once you’re on the Reconcile page, select the account that you want to reconcile from the drop-down menu. As you can see in the screenshot, we’ve selected a checking account to reconcile.
Normally you would click “Reconcile”—or “Resume reconciling” if you have already started the reconciliation—but notice that we’re getting an alert that our account isn’t ready to reconcile due to an issue. There’s also the option to fix this issue under “We can help you fix it.”
In this case, we have likely either deleted or modified a previously reconciled transaction, so before we can reconcile the next month, we need to resolve it.
Here are a few common mistakes that can mess up reconciliation in QuickBooks Online (and result in you getting a similar alert): changing the date of a transaction, deleting or voiding a previously reconciled transaction (like a check or a bill), or changing the source account of a previously reconciled transaction. These are all things you will want to refrain from doing.
If you think you need to delete something, you should always check with your business accountant first. Deleting something can cause discrepancies between the ending balance from your last reconciliation or it can un-reconcile a transaction that was already reconciled. Obviously, you wouldn’t want to do either of these.
Let’s get back to our case example. How do we fix our issue so we can start to reconcile in QuickBooks Online? We click on the blue “We can help you fix it” link to see what went awry.
The screenshot below is of the Reconciliation Discrepancy Report. This is where you’ll land when you click the fix-it option. In the example, the issue was caused by someone force reconciling an expense by entering an “R” in the checkmark column of the register. This is something you should never do as it does not actually reconcile the transaction—it simply causes a discrepancy.
Fortunately, we can change it back to a “C” for cleared while in this window. Note the result of this quick fix in the screenshot below.
Now we’ll navigate back to the Reconcile page. Notice, in the screenshot below, there are two other blue links in the upper right window of Reconcile.
“Summary” is a list of the prior reconciliations and when they were completed. The “History by Account” link shows similar information to the Summary page, but includes changes/auto-adjustments to the prior reconciliations, as well as the ability to print out a reconciliation report.
If you click on “History by Account,” you’ll see the screen below. (The “Undo” option is something only the accountant can do. You will not be able to see it.)
When we click to view the report, the screenshot below is what we see. A QuickBooks Online tip: this report can get very long, so you can check the “Hide additional information” box, in order to only see data up to the statement ending date. This will help you visually so you don’t get confused with transactions dated past the date you are trying to reconcile to.
Step 3: Enter Statement Information
To return to the Reconcile window, click the blue “Reconcile” link at top right corner of the report.
We’re ready to start to reconcile a bank statement in QuickBooks Online, so it’s time for us to enter the statement information.
As you can see below, there are three critical fields: the “Beginning balance,” the “Ending balance,” and the “Ending date.”
We want to reconcile a bank statement for the month ending June 30, 2018, so that’s what we’ll enter as the end date. The statement shows an ending balance of 1,068,099.65 as of June 30, so we enter that in, as well. The “beginning balance” field will be auto-populated with the end balance of the previous month (May 2018).
Next we’ll click on “Start reconciling.”
Step 4: Match and Clear Transactions
The screenshot below is the page you’ll be taken to next. You’ll need to check this page against the bank statement and check off all of the transactions—payments, deposits, etc.—that show up on the bank statement as cleared.
The more transactions you check off, the lower the difference will be between the statement ending balance and the cleared balance, until finally the difference field will be zero.
Step 5: Apply Filters So Transactions Are Easier to Find
Let’s look at some key ways to filter the above window that will help you locate transactions. The window defaults to all transactions in the register that have yet to be reconciled by the statement ending date.
You can filter the window by Payments or Deposits to streamline the visual. If you click on the filter icon, you can see more options for filtering the data including: Cleared status (the “C” in register column), Transaction type, Payee, and Date.
The Find field can search based on memo, reference number, amount, and greater than/less than.
You can edit any information from your statement by clicking the Edit Info tab.
You can also choose to save the work for later, if you’re still trying to figure out why the “Difference” between “Statement ending balance” and “Cleared balance” is not zero.
Step 6: Continue Clearing Transactions Until the “Difference” Field Is Zero
Ultimately, your goal is the Success! Window below. Once you get to this page, then you can run the Reconciliation report that we looked at earlier by clicking on “View report.” Alternatively, you can click on “Done” if you don’t want to run the report right now.
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Final Word on QuickBooks Online Bank Reconciliation
It’s a good idea to get into the habit of reconciling your bank statements in QuickBooks online on a monthly basis. And the best practice is to do it as soon as you receive your bank statement. As you can see, bank reconciliation is an essential skill in learning how to use QuickBooks Online. However, it is a straightforward, step-by-step process, so get to it!
How To Reconcile Corporate Credit Cards In QuickBooks Online
Reconciling corporate credit cards in QBO is a little complicated due to how they are set up in the software. Starting with a proper chart of accounts and bank feeds setup is crucial. Most corporate credit cards have multiple users, each represented by a separate bank feed in QuickBooks Online. This causes a lot of confusion for business owners and bookkeepers alike and is always a big part of the initial cleanup work we do for our clients.
Here is the recommended way to set up credit card feeds in QuickBooks Online for proper reconciliation workflow. Let’s use a Bank of America credit card with three users as an example:
BOA Credit Card
BOA Credit Card: CORP
BOA Credit Card: User 1
BOA Credit Card: User 2
BOA Credit Card: User 3
The parent account will not have a bank feed, but this is the account we will use to prepare bank reconciliations. In other words, this account is created in QuickBooks Online as an umbrella account for all users.
Each of the sub-accounts has its own bank feed in QuickBooks Online and represents each individual user’s card.
The CORP sub-account also has its own feed, which pulls only credit card payments, finance charges and account fees (late payment fees, annual fee, etc.).
Classifying Bank Feed Transactions
When you record credit card expenses or classify bank feed transactions, you will use each individual user’s bank feed and the corresponding register. When classifying credit card payments and finance charges, you will use the CORP account bank feed.
Recording Credit Card Payments
I recommend using the “Transfer” function to record credit card payments. Start with the “Transfer From” account. This is where your payment is coming from, for example your business operating account.
If you are working from the bank feeds, click on the payment bank feed line, select “Transfer” and choose your BOA Credit Card: CORP as the “Transfer To” account. Essentially, when you make a credit card payment, you simply transfer money from your operating account to the credit card.
When the payment clears the bank, you will be able to simply match it in the BOA Credit Card: CORP bank feed.
You can also use the “+ New” button to record a transfer from your operating account to the BOA Credit Card: CORP and then match the bank feeds in both accounts to the transfer you have created.
Preparing a Bank Reconciliation
At the end of the month, when all of your bank feeds are classified, you will be ready to prepare a bank reconciliation. You will use the ending balance on your credit card statement and reconcile ONLY the PARENT account. All of the sub-account transactions will show up under the parent account umbrella. These transactions should match the credit card statement. Consequently, your parent account balance should match the statement balance (less any uncleared transactions).
Recommended Extra Step
I also prefer to record a month-end (statement-end) transfer from each individual user’s sub-account to the CORP sub-account. The transfer amount equals each user’s total monthly charges. Recording these transfers will not affect the bank reconciliation of the parent account. What it accomplishes is keeping an accurate monthly balance in your bank feeds on the Banking Dashboard. If you do not make the transfers, your credit balances will keep growing indefinitely in the user sub-accounts, and your debit balance will keep growing in the CORP sub-account. This step is performed to keep the balances clean.
How to Reconcile in QuickBooks Online
You’re a savvy business owner. You know Intuit’s QuickBooks is your accounting software and it produces your company’s accounting file. You know you—or your bookkeeper—are supposed to reconcile your transactions at the end of the month. What you might not know is that once your transactions are reconciled—and only then—you can populate reports that string together all of your financial information.
You can’t create these holistic reports within your bank, where all your information is siloed, so you have to ensure the information in your accounting file matches each of your bank and credit card account statements by reconciling.
What Is Reconciliation?
When used in reference to accounting and finance, reconciling means comparing two documents to make sure they match.More specifically, you’re making sure the data in your QBO accounting file matches what you see on your bank statements. This is also referred to as bank statement reconciliation, bank reconciliation, or credit card statement reconciliation, but most folks refer to it as simply “reconciliation” for short.
Through this process, you’ll want to make sure you’re reconciling each one of your checking accounts, savings accounts, and credit card statements to make sure your QuickBooks account balance information matches your account statement. Any differences between the two should be (you guessed it) reconciled.
How Often Should I Reconcile?
To be as accurate as possible, you should reconcile transactions monthly. When you’re ready to start reconciling in QuickBooks Online, here are six easy step-by-step instructions for you to follow.
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Step 1: Gather Your Bank Statements
Whether they are mailed or emailed to you, you should gather your bank and credit card statements before you begin reconciling your accounts in QuickBooks. These will be your source of truth to compare your accounting file against because these are the transactions that have officially posted to your bank account.
Step 2: Log in to QuickBooks Online
Go to QuickBooks Online login page and enter your credentials to access your account.
Step 3: Select an Account to Reconcile
Navigate to the “Reconcile” page by clicking the gear icon, then in the “Tools” column you’ll select “Reconcile.” Once you’re on the Reconcile page, you’ll select a bank account to reconcile from the drop-down menu.
Step 4: Input Bank Statement Information
Once you’ve selected which account you’d like to reconcile, enter the ending balance and ending date as it’s listed on your bank statement. There’s also a beginning box that is listed there, but you won’t need to edit that.
Keep in mind, the ending balance of the month prior should match your beginning balance of the current month each time you begin. Current reconciliations and balances that match are the first signs that your accounting file is healthy.
Step 5: Clear Transactions
Now comes the part where you’re actually reconciling. With your statement nearby, you’ll match transactions to your bank statement (The transactions listed on your statement will be only the ones that have cleared.) and check that the amount listed on your statement matches the amount listed in your accounting file. It’s best to move down the page on your bank statement to ensure every transaction there is checked against something in your accounting file, rather than the other way around.
If the transaction amounts on your statement and in QBO match, check them off one by one on the far right side of the page. Keep them check-marked, and you’ll notice the “Difference” section at the top changes in amount as you go.
Once you’ve gone through all the transactions shown on your bank statement, if the amount in your QBO file does not match the amount listed on the statement, you should update the amount in your QBO file to reflect the cleared balance in your bank statement. Keep in mind, your bank statement is the official record that you’re reconciling your accounting file against.
Tip: Filter Transactions
There are times that your bank statement and accounting file will have hundreds of transactions needing to be reconciled. This is typical for small business accounts and shouldn’t cause you any alarm—spending and earning both fluctuate which is how these transactions populate in the first place. Filtering can help you process them faster and greatly reduce the amount of work needed to clear your transactions. On the far left side of the reconciliation screen, you’ll notice a filter icon. Use this handy tool to apply more filters so transactions are easier to find, but don’t forget to clear them when you’re done.
The filter tool will let you filter by payments, deposits, cleared status, transaction type, payee, and date—including specific ranges. The Find field can also search for specific memos, reference numbers, amounts, and greater/less than. Work through each transaction in your bank statement and use the available filters to quickly find them in your QBO.
Step 6: “Finish Now”
Continue check-marking transactions until you have found every transaction listed on your bank statement and the “Difference” field up at the top of the screen is “zero.” When that happens, you’ll see a green checkmark appear. Once you’ve clicked the green “Finish Now” button that appears where the “Save for later” button usually sits, your account is reconciled. Congratulations, you’ve done it! You’re ready for the next accounting period.
Common Troubleshooting Questions
These aren’t steps you need to go through to complete your process, but extras that will help you along the way. We’ve gathered a few tips and information from the experts and listed them below.
What if the Difference Isn’t Zero?
The difference field will always get to zero. If you’ve reached the end of your statement and your difference lists anything other than zero, go back and check to make sure you’ve checked off every transaction listed. Filtering transactions will come in especially handy if you run into this.
Adding Transactions From The Account Statement
As you scan your account statements you may find that a charge was missed in your accounting file. In order for your reconciliation to be accurate, you’ll need to add that transaction in and reconcile it. To do this quickly select the “+ New” button on the left navigation bar, from the reconciliation window. Choose the appropriate transaction description and drop all of the details in. Then, click the Save and New button or the arrow next to it to select Save and Close.
How to Make Edits
If you need to update the ending balance or ending date that you entered in Step One, simply click the “Edit Info” button in the upper-right of the page. A screen will open to let you make the changes, and you can save or cancel those changes from there.
Don’t Forget to Save Your Work
Make sure you save your work before you exit out of the screen. Next to the “Edit Info” button in the upper-right corner of the page, you’ll see a button that reads “Save For Later,” with a drop-down arrow beside it. You can save and come back later, in case you need to run to another meeting or have other important tasks to complete—like payroll. You can also choose to “Finish Now,” or “Close Without Saving” if you need to abandon the work you’ve done and start over.
Helpful Shortcuts In QuickBooks
Here are some helpful shortcuts in QBO that you can use throughout the entire accounting file.
What Comes Next?
Once completed, you’ll be able to access your finalized work as a reconciliation report. You can find these at any time by navigating to the Reconcile page in QuickBooks, then clicking on the Summary link in the left corner of the page.
Make sure to repeat steps one through six for each bank account statement you receive. You’ll need to do this for each credit card, savings account, and checking account your business has before you—or your accountant—close the books for the month. Keeping your reconciliations up-to-date will help you ensure that your business, and accounting file, are healthy and ready to take on any growth or challenges around the corner.
A healthy accounting file with proper reconciliation will super-charge the rest of your finances. There’s a reason we say bookkeeping is the building block of your business finances—it is! These steps, from bookkeeping to reconciliation, will set up the rest of your financial reporting. This gives you data you can lean on or wishy-washy numbers you lose sleep over.
It all comes back to keeping a pristine accounting file. Want to make sure your file is in tip-top shape? Get a free health check in minutes and get actionable insights to improve the health of your accounting file.
Reconciling Bank and Credit Card Accounts in QuickBooks
Learn the Procedure to Reconcile your bank accounts and credit card accounts in QuickBooks
Reconciling bank and credit card accounts assists the users in catching any irregular, incorrect or unidentified transactions that might end up in wrong account balance. Reconciliation is the process in which the user can compare the financial transactions that are entered in the QuickBooks software with the bank/credit card company’s records. The QuickBooks experts recommend to reconcile the bank & credit card accounts in QuickBooks software on a regular basis, as this will ensure the accuracy of accounting records. Many users are unaware of the benefits of reconciliation. Reconciling the bank and credit card accounts assists the users in the following ways:
- QuickBooks accounting software accounts for all the financial transactions, which includes payments, reports, deposits, statements, and bank fees.
- Also, with the help of reconciliation, all the financial transactions that are present in the QuickBooks bank register, along with their ending balances, tally with the actual bank or credit card account.
Reconciling is a step by step process, and in this article we will be explaining the entire process in detail to Reconcile Bank and Credit Card Accounts in QuickBooks. If you want to understand the step by step process of bank and credit card account reconciliation in QuickBooks software, then stick to this blog till the end.
You may also read: Why QuickBooks desktop Pro is best for your business?
Points to remember:
Before you start reconciling the account, keep the following points in mind:
- Make sure to have the copy of the bank or credit card statement.
- Take the backup of the QuickBooks company file.
- The next point to remember is to type in all the uncleared financial transactions for the statement period.
- Also, the user is required to set up the bank/credit card account in QuickBooks accounting software that too with the accurate beginning balance, in order to avoid any nuisance.
Steps to Reconcile Bank and Credit Card Accounts
Once the user begins with the process, he/she will witness two main screens on the system.
1. Start Reconciliation Window
In this particular window, the user is required to select the bank account to reconcile & also analyze all the details that are associated to it. It should also be noted that all the important information present in the window is correct, before jumping to the next step.
To visit the Begin Reconciliation window, the user is required to visit the “Banking” menu, followed by hitting the “Reconcile” tab.
Steps to be followed by Users having QuickBooks Merchant or Payments account:
If QuickBooks Desktop detects that you are not signed in to the Payments account, then in that case a Sign In prompt will show up on the screen. This is to make sure that the account is effectively signed in, and also connected to a legitimate company ID.
- To begin with, in the “Account” section, the user should select the bank/credit card account that is supposed to be reconciled.
- It should be noted that the Statement Date will be filled on its own. In general, it supposes to be 30 or 31 days, after the statement date that the user entered for the earlier reconciliation. The user can alter the date as per the requirement.
- Also, the Beginning Balance will get filled in automatically, which will be the total of all formerly cleared transactions. The user is required to make sure that the beginning balance is equal to the opening balance as per the statement.
- The next step is to type-in the corresponding balance from the statement, in the “Ending Balance” section.
- In case the financial reports display a service charge/interest that you haven’t yet type-in into the QuickBooks records, then mention those amounts into the “Service Charge” and “Interest Earned” field respectively. Also, DO NOT type-in the charges that have been previously typed-in as QuickBooks financial transactions.
- Moving ahead, the user should click the “Locate Discrepancies” icon, in order to find out the available financial reports that will assist the user to locate discrepancies & other reconciliation problems. There is an option to “Undo” & “Restart Reconciliation” tab at the “Locate Discrepancies window”.
- The last and final step is to click on the “Undo Last Reconciliation” button, in case the fixation requires by you to revert to the former reconciliation.
What is the need to undo last financial reconciliation?
The need to undo the last financial reconciliation arises when the user can’t figure out the discrepancies during QB reconciliation or if the user wishes to change the date of the opening balance. Also, it should be noted that after the user undo the earlier reconciliation, the beginning financial balance will revert to the preceding beginning balance & all the previously cleared financial transactions will be uncleared.
- If all details are right, click on the “Continue” tab, in order to carry on to the Reconcile window.
2. Reconcile Screen
Now comes the reconcile screen, where you will be able to refine the preference that is to be matched against the bank statement. This is where the user selects the financial transactions to clear. If a zero difference is displayed on the screen, once the user selects all the financial transactions that show on the statement, then congratulations! This enables you to simply click on the “Reconcile” tab and also this completes the reconciliation.
- Hide financial transactions after the statement’s end date: The is required to put the confirmation mark in the box, if the user desires to display the financial transactions covered only by the statement period on which the task is performed. This will help the user to avoid perplexity, especially if the user is “behind” in the reconciliation process.
- Type-in the Transactions in QuickBooks: These are listed & separated into two fields – the Checks and Payments (Money out) and Deposits & other Credits (Money in).
- If the user is reconciling the credit card account, then in that case the fields will be Charges and Cash Advances (purchases) and Payments and Credits (payments to the credit card company).
- Now, the user will be required to authenticate the financial transactions against the actual bank or credit card statement.
- Followed by selecting only the one that appears on the statement & also ensure that the amounts are identical.
- Lastly, it should be noted that as the transactions are selected, the Cleared Balance changes.
What if there are manifold Financial Transactions?
In such case by default, the financial transactions are scheduled as per the date. In case there are a lot of financial transactions for statement period, the it might be easier for the user to resort transactions, especially if he/she is trying to spot a transaction with a specific amount, reference, etc.
- The first step in this process is to click once, and it will automatically sort the financial transactions.
- And then clicking on it for the second time, will reverse the sort.
- For example, if the user wishes to organize the financial transactions according to the amount, then he/she is supposed to click on the “Amount” column header.
- The financial transactions are rearranged in ascending or descending sequence.
- Items marked as clear: This field shows up the total number, total amount of Deposits, and also Check selected by the user. Certain banks endow the identical summary of the financial transactions on their statement. This section saves a lot of time for the user, if the user wishes to verify for the discrepancies.
- Mark All/Unmark All: When the user will click on any of these buttons, he/she will select/deselect the financial transactions. If the user reconciles on a customary basis, and if all transactions for the statement period were entered correctly, then selecting all the financial transactions at once might contribute to save time. The user is required to ensure that the reconcile window shows a zero difference between the ending balance and cleared balance.
- Go To: This section opens or edits the financial transaction from the reconciliation screen. It is helpful in case when the user wishes to do small edits on the financial transaction, before the user marks it reconciled or cleared.
- Matched: If the account that the user is attempting to reconcile is setup for online banking, then in that case he/she is supposed to click on this button and it will automatically choose the financial transactions that were downloaded & auto-matched.
- Columns to Display: Selecting this specific button will allow the users to opt for the sections that the user would like to display.
Now question comes that why it’s necessary to select columns?
QuickBooks software displays the Date, Amount, Payee, and CHK # columns by default. But the exception is only for the Amount column, the user can add or remove the other areas to avoid perplexity. For example, in case the statement demonstrates the reference # for most of the financial transactions, then the user can select to present only the CHK # & AMOUNT columns. With the help of this method, the user can simply spot and mark the financial transactions.
- Modify: The user can press this tab, if the user wishes to make modification at the last moment on the details/information’s that the user has typed in to the Begin Reconciliation window.
- This field endows the user with a peep of the reconciliation figures.
- Service Charge, Ending Balance, and Interest Earned: All of them are based on the amount entered for these areas in the Begin Reconciliation window.
- Cleared Balance: The figure reduce when the users select/clear the checks and payments & increases when they select/clear the deposit and other credit amount.
- Difference: This allows the user to find out the difference among the beginning balance that was entered and the cleared balance (the financial transactions that was selected up till now). Also, it should be noted that as per the ideal conditions, the difference should be null.
- Leave: The user is required to opt for “Leave” button, in order to operate other account or to edit financial transactions after moving out of the reconcile window.
See Also: How to Update QuickBooks error 1328?
What will happen after clicking on the “Leave” button?
QuickBooks accounting software tracks the financial transactions already manifested as clear – that is, they remain checked in the Reconcile window. The user is supposed to visit the account register, an asterisk (*) will appear in the cleared column of the financial transactions that the user has marked until the reconciliation process completes. The asterisk symbol depicts that the financial transaction is awaiting or pending due to QuickBooks bank account reconciliation with the financial statement hasn’t finished completely.
When the user is prepared to resume the reconciliation process, he/she will be required to go back to the “Begin Reconciliation” window, and also re-enter the beginning balance & proceed with reconciliation as usual
- Reconcile Now: The user can opt for the “Reconcile Now” button in a situation when the process of selecting all the financial transactions completes.
If the difference is zero: QuickBooks software will save the reconciliation & shows the “Select Reconciliation Report” window. The user is then required to select the category or type of report and later perform click on either the “Display” or the “Print” tab. The user should select the “Close” tab, if you want any financial reports at this point of time.
QuickBooks software allows the user to select among the “Reconciliation Summary” or “Reconciliation Detail” report, or the user can select both of them. Though it doesn’t show after the user finishes the reconciliation process, the ‘Reconciliation Discrepancy Report’ is also available in QuickBooks to assist him/her to figure out any problem or issue that occur while reconciling the account.
If the difference is anything but zero: QuickBooks software shows the “Reconcile Adjustment” window. The user can select from the following:
If you want to find the journal entry, you can:
- Return to Reconcile: To go back to the earlier window.
- Leave Reconcile: To move out of the reconciliation window, in order to review or edit existing financial transactions that are causing the issues.
- Enter Adjustment: If the user would wish to finish the reconciliation procedure even if he/she didn’t get a zero difference on the preceding window. QuickBooks software will automatically type-in the Journal Entry under a special expense account known as Reconciliation Discrepancies. It can be verified & edited as required by going to the Chart of Accounts.-
- Use the Find feature.
- In the “Edit” menu, click on the “Find” tab.
- In the “Find” window, navigate to the “Advanced” tab and choose the “Memo filter” icon.
- Under the “Memo” section, enter the “Balance Adjustment” and later, click on the “Find” tab.
- Any balance adjustment will be displayed.
- See the Previous Reconciliation report.
- In the “Reports” tab, click on the “Banking” tab => “Previous Reconciliation” tab.
- Under the “Cleared Transaction” field, the “General Journal Entry” will appear at the top in a situation where the balance adjustment was made
- Use the Find feature.
For Credit Card Accounts: If the ending balance is anything except zero, QuickBooks software will pop-up the “Make Payment” window & redirect to write a check or enter a bill to pay for the outstanding balance. If you do not desire to record payment, you can click on the “Cancel” tab.
3. Reconciliation Discrepancies
The user might come across technical hassles while reconciliation of the bank/credit card account. Discrepancies are mismatches caused by financial transactions in the account that don’t agree with your printed statement.
Below are two of the available resources dealing with mismatches and other reconciliation issues?
- Zero or incorrect Beginning Balance in the Begin Reconciliation Window
- Fix reconciliation discrepancies
With this we end the article here, and also hope that with this technical article you will be enlightened with deep knowledge about the bank & credit card reconciliation.
However, if the user is still confused or have any queries, then he/she can feel free to take the advanced assistance of the QuickBooks certified technicians and ProAdvisors. You can dial our QuickBooks enterprise customer support helpline .i.e.+1-888-300-3913.