Reconciliation is the process of matching transactions you entered in QuickBooks against your bank’s or credit card company’s records. It is highly recommended that you reconcile your bank/credit card accounts in QuickBooks on a regular basis to ensure accuracy of your accounting records. More specifically, reconciliation helps ensure that:
- All your transactions such as payments, deposits and bank fees are accounted for in QuickBooks.
- All transactions in your QuickBooks bank register, as well as its ending balance, match what you have in your actual bank account.
Before your start reconciling the account, make sure you have:
- Set up the bank or credit card account in QuickBooks with the correct beginning balance.
- Entered all uncleared transactions for the statement period.
- Received a copy of your bank or credit card statement. A pencil for marking the selected items on your statement may also be handy.
The Reconciliation Process
You will come across two main windows as you start and complete the reconciliation process.
When you troubleshoot issues with bank or credit card accounts, you may need to delete and re-enter transactions and then reconcile them again. To save time and not go through undoing previous reconciliation for each month until you find the transactions causing the discrepancy, you can simply do a special reconciliation.
Before proceeding, make sure to find and correct what's causing the beginning balance discrepancy.
- From the Banking menu, choose Reconcile.
- In the Statement date field, enter the date of the incorrectly reconciled month.
- In the Ending balance field, enter the balance plus/minus the difference. If the difference is positive, add it to the beginning balance. If the difference is negative, subtract it to the beginning balance. In the example provided, the beginning balance is $101, 013.99 and the difference is $866.72. If we add this up, our ending balance is $101, 880.71.
- Select OK.
- On the Reconcile screen, put a checkmark on the transactions that were un-reconciled. Make sure the difference is 0.
- Select the Reconcile button.
- Review the Previous Reconciliation Detail Reports again. Note that both reports will now show the same data.