Reconciliation is the process of matching transactions you entered in QuickBooks with your bank or credit card company’s records. It is highly recommended that you reconcile your bank and credit card accounts in QuickBooks on a regular basis to ensure accuracy of your accounting records. More specifically, reconciliation helps ensure that:
Before you start reconciling the account, make sure you have:
You will come across two main screens as you start and complete the reconciliation process.
In this window, you choose the account to reconcile and review all the information corresponding to it. It is important that all information in this window is accurate before proceeding to the next step.
To go to the Begin Reconciliation window, go to the Banking menu and click Reconcile.
|For customers with QuickBooks Merchant or Payments account:
If QuickBooks Desktop detects that you are not signed in to your Payments account, a Sign In prompt will appear. This is to ensure that your account is successfully signed in and linked to a valid company ID.
You will normally need to undo last reconciliation when you cannot locate discrepancies during reconciliation or if you want to change the date of the opening balance. Note that when you undo previous reconciliation, your beginning balance will revert to the previous beginning balance and all previously cleared transactions will be uncleared.
In this window, you can refine the choices you want to match against your bank statement. This is where you select transactions to clear. If this window shows a zero difference after you select all transactions that appear on your statement, then congratulations! You can simply click the Reconcile button and you’re done reconciling the account.
By default, the transactions are listed according to date. If there are too many transactions for the statement period, it may be easier for you to resort transactions, especially if you are trying to find a transaction with a specific amount, reference #, etc.
Click the header/title of the column you want to resort. Clicking it once automatically sorts the transactions. Clicking it a second time reverses the sort. For example, if you want to arrange transactions according to amount, click the Amount column header. The transactions are rearranged in ascending or descending order.
By default, QuickBooks displays the Date, CHK #, Payee and Amount columns. Except for the Amount column, you can add or remove the other fields to help avoid confusion. For example, if your statement shows the reference # for most transactions, you can choose to display only the CHK # and AMOUNT columns. This way, you can easily find and mark transactions.
QuickBooks keeps track of the transactions you already marked as cleared -- that is, they remain checked in the Reconcile window. When you go to the account register, an asterisk (*) is displayed in the cleared column of the transactions you marked until you complete the reconciliation. The asterisk indicates that a transaction is pending because you haven't finished reconciling your QuickBooks account with your financial statement.
When you are ready to resume reconciling, you need to go back to the Begin Reconciliation window, re-enter the beginning balance and proceed with reconciliation as usual.
If the difference is zero: QuickBooks saves the reconciliation and displays the Select Reconciliation Report window. Choose the type of report and then click either Display or Print. Click Close if you do not need any reports at this time.
QuickBooks gives you the option to choose between Reconciliation Summary or Reconciliation Detail report, or select both. Though not displayed after you completed the reconciliation process, the Reconciliation Discrepancy Report is also available in QuickBooks to help you figure out any discrepancy or issue when reconciling the account.
If the difference is anything but zero: QuickBooks displays the Reconcile Adjustment window. The options available in this window are:
If you need to locate the journal entry, you can:
FOR CREDIT CARD ACCOUNTS: If your ending balance is anything but zero, QuickBooks will display the Make Payment window and prompt you to write a check or enter a bill to pay for the outstanding balance. If you do not want to record payment, you can click Cancel.
You may encounter discrepancies as you reconcile your bank or credit card account. Discrepancies are mismatches caused by 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.