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Fix issues the first time you reconcile an account in QuickBooks Online

by Intuit Updated about 9 hours ago

Reconciling your accounts in QuickBooks Online is a vital task to keep your financial records accurate and reliable. By understanding the reconciliation process, identifying and correcting any errors, reconciling your account, and verifying your reconciliation, you can fix any issues you encounter during your first reconciliation. 

It’s not unusual for issues to arise during the reconciliation process, particularly if it's your first time reconciling an account. In this article, we'll guide you through the steps to fix any issues you encounter during your first reconciliation, so you can keep your records accurate and reliable.

In this article, you'll learn how to:

Step 1: Understand the reconciliation process

Before diving into the reconciliation process, it's important to understand how it works. Reconciliation is the process of comparing your QuickBooks records with your bank or credit card statements to ensure that they match. When you reconcile your accounts, you'll need to review each transaction and mark it as cleared or not cleared. This process helps you identify any discrepancies or errors in your records.

Step 2: Review the opening balance

Double-check the opening balance for the account you're reconciling. Sometimes, the opening balance doesn't include transactions that were still pending when you created the account. The opening balance is the balance of your bank account on the day you choose to start tracking transactions.

Note: If you recently entered older transactions dated before your opening balance, here's how to reconcile them. Or, if you forgot to enter an opening balance, here's how to manually enter an opening balance later.

  1. Go to Bookkeeping or Accounting and select Chart of accounts (Take me there).
  2. Find the account on the list.
  3. Select Account history.
  4. Search for the opening balance entry. It should have Opening Balance Equity in the Payee Account column, and Opening Balance in the Memo column.
  5. Take note of the date and balance.

Step 3: Compare the opening balance with your real-life account

Now that you know the date and amount of the opening balance in QuickBooks, you can check it against your bank records:

  1. Sign in to your bank's website or find your bank statement.
  2. Check the account's balance for the same day as the opening balance in QuickBooks.
  3. Compare the two balances.
  4. If the balances match, you entered the opening balance correctly. 

If the opening balance in QuickBooks doesn't match your bank records, correct it:

  1. In QuickBooks, select the opening balance entry to expand the view.
  2. In the Deposit column, edit the balance so it matches your bank records.
  3. Select Save.

Step 4: Review your account history

When you reconcile an account for the first time, the opening balance is the only entry that is reconciled. No other transactions should be reconciled. To check this:

  1. Go to Bookkeeping and select Chart of accounts (Take me there).
  2. Find the account on the list.
  3. Select Account history to get more details.
  4. Search for the opening balance entry. It should have Opening Balance Equity in the Payee Account column and Opening Balance in the Memo column.
  5. Review the checkmark column. There should have an R in the box.
  6. Check the rest of the transactions on the list. There should be a C or blank box in the checkmark column.
  7. If there's an R on any other transactions, select the transaction to expand the view.
  8. Select box in the checkmark column. Keep selecting it until the box is blank. Then select Save.

Note: Transactions that have come directly from your bank account will have a green box icon next to it. For transactions that have been automatically added into QuickBooks from your bank feed, you will see a green box with a + sign.

Step 5: Reconcile your account

Once you've identified and corrected any errors, it's time to reconcile your account. To do this, follow these steps:

  1. From the Gear icon menu, select Reconcile (Take me there).
  2. Choose the account you want to reconcile and select Reconcile Now.
  3. Enter the ending balance from your bank statement and the ending date of the statement period.
  4. Check off all the transactions that appear on both your bank statement and in QuickBooks.
  5. If there are any transactions that do not appear on your bank statement, but do appear in QuickBooks, mark them as cleared to account for them.
  6. Select Finish Now to complete the reconciliation.

Step 6: Verify your reconciliation

After reconciling your account, it's important to verify that the reconciliation was successful. To do this, run a reconciliation report and compare it to your bank statement. 

If everything matches up, you're good to go. If there are still discrepancies, you may need to repeat the process or seek assistance from a professional.

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