To always match your bank and credit card statements, it is crucial to reconcile an account in QuickBooks. Similar to balancing checkbook, you are required to review your accounts in QuickBooks, to ensure that they match the bank and credit card statements. This is how to reconcile in QuickBooks. When having a bank statement in hand, you must compare each transaction with the ones entered in QuickBooks.
In case everything tallies, your accounts are balanced and accurate. It is suggested to reconcile your checking, savings, and credit card accounts each month. To help you with the reconciliation process, here we are with this segment. Note that, the procedure to reconcile in QuickBooks online and QuickBooks desktop differ. So, in this segment, we have tried to cover both aspects. Keep reading to learn how to reconcile in QuickBooks. Let us have a look:
How to reconcile in QuickBooks Online?
If you are a QuickBooks Online user, here is how you can reconcile in QuickBooks Online:
Step 1: Review your opening balance
In case you are reconciling an account for the very first time, then you simply need to review the opening balance. This needs to tally the balance of the real-life bank account for that particular day you decided to start tracking transactions in QuickBooks Online.
Note: You can skip a step by connecting your bank and credit cards to online banking. It automatically downloads transactions and further enters the opening balance for you.
Just in case you forgot to enter an opening balance in QuickBooks in the past, then need not worry. You can learn to enter an opening balance.
Also, note that entering a service charge and interest-earned options are available only when the bank account is not connected to online banking.
Step 2: Start Reconciliation
After you have your monthly bank or credit card statement, you can begin reconciling. If you are reconciling multiple months, then do them one statement at a time, start with the oldest statement:
- Head to the Settings tab and then choose reconcile
- In case you are reconciling for the first time, then choose Get Started
- Now, from the account dropdown, you need to choose the account you wish to reconcile.
- Ensure it is the same one on your statement.
It is essential that if you see a message about a previous reconciliation, then choose we can help you fix it. You need to resolve this before you start.
- You need to review the beginning balance and further ensure that the beginning balance in QuickBooks matches the one on the statement.
- Also, enter the ending balance and ending date on the statement.
- Some banks call the ending balance a new balance or a closing balance.
- In case you see it, review the last statement ending date. This is the end date of the last reconciliation. Your current bank statement should start the day after.
- After you are ready to start, choose start reconciling.
Step 3: Compare your statement with QuickBooks
Now, it is time to compare the transactions on the statement with what’s in QuickBooks. Go over them one by one. And then ensure that you have the right dates and transactions in QuickBooks.
- The very first step here is to head to the transaction on the statement
- Now, find the transaction in the reconciliation window in QuickBooks
- You will have to compare the two transactions. And if they match, put a checkmark next to the amount in QuickBooks.
- This marks it as reconciled.
- In case a transaction doesn’t appear on the statement, but you see it in QuickBooks, then skip putting a checkmark.
- You now have to compare each transaction on the statement with what’s in QuickBooks
Note that, if you are sure that you have found a match and something minor is not right, then you simply have to choose the transaction in QuickBooks to expand the view. Now, select edit and make edits so the details match the statement
- After you reach the end, the difference between the statement and QuickBooks should be $0.00. In case it is, then choose finish now.
It should be noted that if the difference isn’t $0.00, or you can’t find a transaction that should be in QuickBooks.
Other Steps: Review past reconciliation
You need to run a reconciliation report to review the work:
- Head to the settings tab and then reconcile
- Now, choose history by account
- You need to use the dropdown menu to choose the account and date range. Or print or export the reconciliation reports, in case you need to share them.
Edit completed reconciliations
It is possible to make changes to the past reconciliations, but carefully. At times, changes can unbalance the accounts and other reconciliations. It further affects the beginning balance of the next reconciliation. You need to start by reviewing a previous reconciliation report. In case you have reconciled a transaction mistakenly, then you can unreconcile it.
How to reconcile in QuickBooks Desktop?
Just like QuickBooks online, it is possible to reconcile an account on a QuickBooks desktop. Here is how to reconcile in QuickBooks:
Step 1: Review your opening balance
Before you start the reconciliation, ensure that you back up your company file. In case you are reconciling an account for the very first time, then review the opening balance.
Here is what you need to know about opening balances:
When you create a new account in QuickBooks, you simply need to pick a day to start tracking the transactions. You are supposed to enter the balance of the real-life bank account for whatever day you select. This is the opening balance. It is suggested to set the opening balance at the beginning of a bank statement. This makes the first reconciliation much easier.
Step 2: Prepare for reconciliation
Ensure that you enter all the transactions for the bank statement period you wish to reconcile. In case some transactions haven’t cleared the bank yet and aren’t on the statement, wait to enter them.
Step 3: Start the reconciliation
After you get the bank statement, you can begin with the reconciliation.
In case you are reconciling multiple months, start with the oldest bank statement. Note that you need to reconcile each month separately.
Also, just in case you are reconciling a merchant or payments account and QuickBooks desktop sees that you aren’t signed in, then you will see a sign-in window. This further ensures that the account is successfully linked to a valid company ID.
- Head to the banking menu and further choose reconcile
- You now have to choose the bank or credit card account in the account field you wish to reconcile
- The statement date is automatically filled in. It is 30 or 31 days after the statement date of the previous reconciliation. You need to change it as needed to match the bank statement.
- QuickBooks also enters the beginning balance and it uses the ending balance from the last reconciliation to get the number
- Now, enter the ending balance based on the bank statement
- Further, enter the service charge and interest earned depending on the bank statement
- Avoid entering the charges you have already entered in QB
- You will now have to review the fields and in case the info is correct, then choose continue tab or ok.
Just in case your beginning balance doesn’t match your statement, then need not worry. There are a few tools that can help you:
- In case the numbers do not match, then choose to locate discrepancies. This will give you reports you can use to find discrepancies and other reconciliation issues.
- If you still have issues, then you can fix the opening balance and beginning balance
- Just in case you need to start over from scratch, then choose to undo the last reconciliation.
Also, note that when you undo a previous reconciliation, then your beginning balance reverts to the beginning balance of the previous reconciliation. All the cleared transactions on the reconciliation become uncleared.
Step 4: Compare the bank statement and QuickBooks
To reconcile, you need to simply compare the list of transactions on the bank statement with what’s in QuickBooks. Ensure that you have the right dates and transactions. After you are done reviewing the statement, then you will know everything made it into QuickBooks.
Match the transactions
- Once you are ready, begin with the first transaction on the bank statement
- Now, find the same one in the reconciliation window in QuickBooks
- You need to compare the two transactions.
- In case the transactions match, choose and put a checkmark in the checkmark column.
- This reconciles the transaction.
- You need to compare each transaction on the statement with what’s in QuickBooks.
- As you clear or add transactions to the reconciliation, the cleared balance amount decreases.
- The amount increases in case you clear or add deposits and other credit amounts.
In case a transaction doesn’t appear on the statement, then don’t mark it as reconciled. Here are some quick ways to check if things are matching:
- In case you want to see the total number and amount of transactions that you have added to the reconciliation, search for the items you have marked in the cleared section. Many banks provide the same summary of transactions on bank statements. You need to compare the total number of transactions to see if anything is missing.
- Also, if you need to edit or get more info about a specific transaction, choose the transaction and then click on go to or double-click
- If you need to take a step back and make a change to the info you entered in the third step choose modify. The service charges, interest, and ending balance info are shown in the section next to it.
- Towards the end, the difference between the bank statement and QuickBooks should be $0.00 and if it is, choose reconcile now.
Next Steps: Review the reconciliation
After you reconcile, you need to choose display to view the reconciliation report or print to print it. Your work is done. In case you need to review a reconciliation report later on.
- Head to the reports menu and choose the Reports centre
- Now, look for and open a previous reconciliation report
- The last step is to choose the account you reconciled and then either detail, summary, or both.
Conclusion!
Now that you know how to reconcile in QuickBooks, it is time to implement the steps. We hope that this segment might be of some help to you in reconciling an account in QuickBooks. If you need help performing bulk operations in your QuickBooks, reach out to our support team at Transync Pro, and we will be more than happy to help out.
Some More Important Reads:
Creating and Utilizing Classes in QuickBooks
How to Send an Invoice in QuickBooks?
