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.
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.
- 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.
- In the Account field, select the bank or card account you want to reconcile.
- 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.
- 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.
- In the Ending Balance field, enter the ending balance as it's written on your bank statement.
- 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.
- 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.
|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).
- When you're ready, start with the first transaction on your bank statement. Find the same one in the Reconciliation window in QuickBooks.
- Compare the two transactions. If the transactions match, select and put a tick in the tick column. This adds it to the reconciliation.
- 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.
- 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:
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:
If you need to look for adjustments later on:
You'll see all of your adjustments on the list. Then review a Previous Reconciliation report for the reconciliation you adjusted:
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 Detail, Summary, 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: