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Intuit

Reconcile an account in QuickBooks Desktop

Learn how to reconcile your accounts so they match your bank and 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 card statements. This process is called reconciling.

We recommend you reconciling your checking, savings, and card accounts every month. Once you get your bank statements, compare the list of transactions with what you entered into QuickBooks.

Step 1: Review your opening balance

If you haven't already, back up your company file.

If you’re reconciling an account for the first time, review the opening balance. It needs to match the balance of your real-life bank account for whatever day you choose to start tracking the account in QuickBooks.

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've entered all your transactions for the bank statement period you plan to reconcile. If there are transactions that haven't cleared your bank yet, you might want to 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.

  1. Go to the Banking menu and select Reconcile.
    Important: If you're reconciling a Merchant or Payments account and QuickBooks Desktop detects 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.
  2. In the Account field, select the bank or 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 you entered for the previous reconciliation. You can change it as needed to match your bank statement.
  4. The Beginning Balance is also automatically filled in. It uses the ending balance from your last reconciliation to get this number. Make sure it matches the beginning balance on your bank statement. If it doesn't, here's how to fix your beginning balance.
  5. In the Ending Balance field, enter the ending balance as it's written on your bank statement.
  6. If your bank statement shows a service charge or interest that you didn't enter into QuickBooks, don't worry. Enter the amounts in the Service Charge and Interest Earned section. Don't enter charges you have already entered as QuickBooks transactions.
  7. If all information is correct, select Continue to start reconciling.

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

To track down discrepancies, select Locate Discrepancies. This gives you reports that will help you find discrepancies and other reconciliation issues.

If you need to start over from scratch, you can select Undo  Last reconciliation. You should only do this after you've tried all the steps to fix your opening and beginning balances.

Note: You can also undo a previous reconciliation if you want to change the date of the account's opening balance.

When you undo a previous reconciliation, your beginning balance reverts back to the beginning balance of the reconciliation before it. 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. The tricky part is making sure you have the right dates and transactions.

If a transaction doesn't appear on your statement, don't mark it as reconciled. When you're done reviewing your statement, you'll know everything made it into QuickBooks.

Here are a few things that will make reconciling easier.

  • If you only want to see transactions for the statement period you're working on, instead of seeing everything, select Hide transactions after the statement’s end date.
  • There are two sections for bank account transactions in QuickBooks: Cheques and Payments (money out) and Deposits and other Credits (money in). If you're reconciling a card account, the sections are Charges and Cash Advances (purchases) and Payments and Credits (payments to the card company).
  1. When you're ready, start with the first transaction on your bank statement. Find the same one in the Reconciliation window in QuickBooks.
  2. Compare the two transactions. If the transactions match, select and put a tick in the tick column. This adds it to the reconciliation.
  3. If you want to sort the list, select the header/title of a column.
    Tip: By default, the transactions are listed by to date. If there are more transactions in QuickBooks than there are on your bank statement, resort the list. This makes it easier to find transactions with a specific amount, reference #, etc.
  4. 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.
Tip: Here are a few more things in the reconciliation window that will help you through the process:
  • The Items you've marked cleared section shows the total number and total amount of transactions you've added to the reconciliation. Many banks provide the same summary of transactions on bank statements. Compare the two to check for any discrepancies.
  • If you reconcile on a regular basis, you can do reviews quickly. If all the transactions are accurate and the difference between your bank statement and QuickBooks is $0.00, you can select Mark All. Then you can add all the transactions to the reconciliation at once.
  • Want to edit or get more info about a specific transaction? Select the transaction and then Go To. This is helpful if you need to make minor edits before you mark a transaction as reconciled or cleared.
  • If the account you're reconciling is setup for online banking, select Matched to automatically select the transactions that were downloaded and auto-matched.
  • You can select Columns to Display to pick which columns appear in the Reconciliation window. By default, QuickBooks displays the Date, CHQ #, 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 CHQ # and Amount columns. This way, you can easily find and mark transactions.
  • 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 information are shown in the section next to it.

When you reach the end, the difference between your bank statement and QuickBooks should be $0.00.

If it is, select Reconcile now to complete the reconciliation.

Important: If the difference isn't $0.00, don't worry.

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

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

  • Return to Reconcile: Go back to the reconciliation and fix any issues.
  • Leave Reconcile: Close the reconciliation so you can review or edit any existing transactions that may be 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 the accounts. You should only do this if you know all of the correct transactions are in QuickBooks and everything is accurate. QuickBooks automatically enters the adjustment as Journal Entry. This is entered into a special expense account called Reconciliation Discrepancies.

If you need to look for adjustments later on:

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

You'll see all of your adjustments on the list. Then review  a Previous Reconciliation report for the reconciliation you adjusted:

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

If you made an adjustment, you'll see a General Journal Entry at the top of the report in the Cleared Transactions section.

Next Steps: Review the reconciliation

After you reconcile, you can select Display to view the Reconciliation report or Print to print it. If you don't need either, close the window. Your work is done.

If you need to review a report, later on, go to the Reports menu and select Reports Centre. Search for and open a Previous Reconciliation report. Select the account you reconciled and then either DetailSummary, or Both.

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:

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