Reconcile an account in QuickBooks Desktop

Learn how to reconcile your accounts so they match your bank and credit card statements.

Just like balancing your chequebook, you need to review your accounts in QuickBooks to make sure they match your real-life bank and credit card statements. This process is called reconciling.

It's recommended to reconcile your chequing, savings, and credit card accounts every month. Once you get your bank statements, compare the list of transactions with what you entered into QuickBooks. If everything matches, you know your accounts are balanced and accurate.

• Step 1: Review your opening balance
• Step 2: Prepare for the reconciliation
• Step 3: Start your reconciliation
• Step 4: Compare your bank statement and QuickBooks
• Next Steps: Review the reconciliation

Step 1: Review your opening balance

Before you start with reconciliation, make sure to back up your company file.

If you’re reconciling an account for the first time, review the opening balance.

When you create a new account in QuickBooks, you pick a day to start tracking transactions. You enter the balance of your real-life bank account for whatever day you choose. This starting point is the opening balance. We recommend setting the opening balance at the beginning of a bank statement. This makes your first reconciliation much easier.

Step 2: Prepare for the reconciliation

Make sure you enter all transactions for the bank statement period you plan to reconcile. If there are transactions that haven't cleared your bank yet and aren't on your statement, wait to enter them.

Step 3: Start your reconciliation

Once you get your bank statement, you can start reconciling.

If you're reconciling multiple months, start with your oldest bank statement. Reconcile each month separately, one statement at a time.

Important: If you're reconciling a Merchant or Payments account and QuickBooks Desktop sees that you aren't signed in, you'll see a sign-in window. This ensures your account is successfully linked to a valid company ID.

1. Go to the Banking menu, then select Reconcile.
2. In the Account field, select the bank or credit card account you want to reconcile.
3. The Statement Date is automatically filled in. Usually, it's 30 or 31 days after the statement date of the previous reconciliation. Change it as needed to match your bank statement.
4. QuickBooks also automatically enters the Beginning Balance. It uses the ending balance from your last reconciliation to get this number.
5. Enter the Ending Balance based on your bank statement.
6. Enter the Service Charge and Interest Earned based on your bank statement. Don't enter charges you've already entered in QuickBooks.
7. Review the fields. If the info is correct, select Continue or OK.

If your beginning balance doesn't match your statement, don't worry. There are a few tools that can help you.

• If numbers don't match, select Locate Discrepancies. This gives you reports you can use to find discrepancies and other reconciliation issues.
• If you still have issues, here's how to fix your opening balance and beginning balance.
• If you need to start over from scratch, you can select Undo Last Reconciliation.

Note: When you undo a previous reconciliation, your beginning balance reverts to the beginning balance of your previous reconciliation. All cleared transactions on the reconciliation become uncleared.

Step 4: Compare your bank statement and QuickBooks

To reconcile, simply compare the list of transactions on your bank statement with what's in QuickBooks.

Make sure you have the right dates and transactions. When you're done reviewing your statement, you'll know everything made it into QuickBooks.

Before you begin

Here are a few things you can do to make your reconciliation easier.

• If you only want to see transactions for the statement period you're working on, select Hide transactions after the statement’s end date.
• If you're reconciling a credit card account, the sections are Charges and Cash Advances (purchases) and Payments and Credits (payments to the credit card company). Focus on one section at a time.
• If you’re reconciling an account for online banking, select Matched. Then, enter the Statement Ending Date from your bank statement. This automatically selects transactions QuickBooks downloaded and matched.

Note: A matched transaction in the register has a lightning bolt next to it. A checkmark replaces the lightning bolt after you reconcile it.

• If you want to sort the list, select the header or title of a column.
• If there are more transactions in QuickBooks than there are on your bank statement, resort the list.

Match your transactions

1. When you're ready, start with the first transaction on your bank statement.
2. Find the same one in the Reconciliation window in QuickBooks.
3. Compare the two transactions. If the transactions match, select and put a checkmark in the checkmark column. This reconciles the transaction.
4. Compare each transaction on your statement with what's in QuickBooks. As you clear or add transactions to the reconciliation, the Cleared Balance amount decreases. The amount increases if you clear or add deposits and other credit amounts.
   If a transaction doesn't appear on your statement, don't mark it as reconciled. Here are some quick ways to check if things are matching:
   
   • If you want to see the total number and amount of transactions you've added to the reconciliation, look for the Items you've marked cleared section. Many banks provide the same summary of transactions on bank statements. Compare the total number of transactions to see if anything is missing.
   • If you need to edit or get more info about a specific transaction, select the transaction, then Go To or double-click.
   • If you need to take a step back and make a change to the info you entered in Step 3: Start your Reconciliation, select Modify. The service charges, interest, and ending balance info are shown in the section next to it.
     
5. When you reach the end, the difference between your bank statement and QuickBooks should be $0.00. If it is, select Reconcile now.

What to do if balances don't match at the end

If the difference isn't $0.00, don't worry. QuickBooks gives you several ways to fix it.

For bank accounts, QuickBooks opens the Reconcile Adjustment window. You have a few options:

• Return to Reconcile: Go back to the reconciliation so you can review everything again.
• Leave Reconcile: Save the reconciliation so you can review or edit any existing transactions causing issues. You can come back and finish the reconciliation later.
• Enter Adjustment: If you want to complete the reconciliation, you can force QuickBooks to create an adjustment to balance everything. You should only do this if you know all of the correct transactions are in QuickBooks and what you entered is accurate. QuickBooks automatically enters the adjustment as a journal entry.

The journal entry goes into a special expense account called Reconciliation Discrepancies.

Review the reconciliation adjustment

To see all of your adjustments on the list, you can review a Previous Reconciliation report for the reconciliation you adjusted. This will show you cleared transactions and any changes made after the transaction that may not show in your discrepancies.

1. Go to the Edit menu, then select Find.
2. In the Find window, select the Advanced tab, then Memo.
3. In the Memo field, type Balance Adjustment, then select Find.

Review cleared transactions

Here's how you can review all of your cleared transactions.

1. Go to the Reports menu, then select Reports Centre.
2. Search for and open the Previous Reconciliation report.
3. Select the account you reconciled, then either Detail, Summary, or Both.
4. Select Transactions cleared, plus any changes made to those transactions since the reconciliation.
5. Select Display.

For other types of accounts, QuickBooks opens the Make Payment window. This lets you write a cheque or enter a bill to pay to cover the outstanding balance. If you don't want to record a payment, select Cancel.

If you run into issues or discrepancies, meaning transactions in QuickBooks don't match your bank statement, don't worry. Here's how to fix mismatches and other reconciliation issues:

• Fix Beginning Balance issues in QuickBooks Desktop
• Fix issues while reconciling accounts in QuickBooks Desktop

Next Steps: Review the reconciliation

After you reconcile, you can select Display to view the Reconciliation report or Print to print it. Your work is done.

If you need to review a reconciliation report later on:

1. Go to the Reports menu, then select Reports Centre.
2. Search for and open the Previous Reconciliation report.
3. Select the account you reconciled, then either Detail, Summary, or Both.

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