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TenVit
Level 2

QBO - Connecting Bank Account and OBE Adjustment

I have a client, my sister, who connected her business bank account to her QBO account that I am currently setting up.  Even though I told her we should connect her bank account to QBO togetherm she did it on her own.  I wanted to make sure the date and amounts were correct. Any way, she now can't remember what "as of date" she put in or the amt. 
I asked her for her Dec bank statement so I can go in and correct the OBE and start a reconciliation. She is my first client, hence,  I have not done this before. Below are the steps that I believe I should take to correct the OBE and start the reconciliation process. We are starting a new set of books for her, she didn't have books before Jan 2021. Well she did, but they were never really used. It is a new small business. We are trying to start fresh in January 2021. As of Jan 1, 2021 she officially separated her business and personal bank accounts.

 

1. Delete current OBE in QBO, I believe this amt. was auto populated based on what info she put into QBO when she was connecting her bank acct to QBO. 

2. Take her Dec bank statement and enter into OBE the amount in her bank account as of Dec 31, 2020.

3. Reconcile that amt. in OBE

4. Then go into her bank register and exclude all transactions prior to Jan 1, 2021. 

5. Reconcile her January bank statement within QBO. 

 

Please let me know if what I plan to do is correct and appropriate. Any words of advice would be much appreciated.

Also, if there is a Bookkeeper out there looking to be a mentor, I would love to connect. I am a new bookkeeper with schooling but no real life experience. 

Thank you in advance.

3 Comments 3
Rea_M
QuickBooks Team

QBO - Connecting Bank Account and OBE Adjustment

You're already on the right track in managing your sister's account, @TenVit. Let me provide further details about this.

 

The steps you've provided above is correct and appropriate. When your sister connected her business bank account to QuickBooks Online (QBO), the system automatically downloads the last 90 days of transactions. Since you want to start managing transactions from January 1, 2021, you'll have the option to update the OBE amount and start date. Then, make sure to mark it as reconciled (R) on the account's register to keep the books accurate.

 

Here's how:

  1. Go to the Accounting menu.
  2. Select Chart of Accounts.
  3. Find the business bank account on the list.
  4. Click View register.
  5. Search for the opening balance entry. It should have Opening Balance Equity in the Account column. Then, select it to expand the view.
  6. In the Deposit column, edit the balance so it matches your bank records for December 31, 2020. Update the appropriate date, then mark it as reconciled.
  7. Click Save.

 

I've attached a screenshot below that shows the last two steps.

82.PNG

 

After that, review and/or match your transactions to the existing entries in QuickBooks. This way, you can keep your financial data updated. For the step-by-step guide, you can check out this article: Categorize online bank transactions in QuickBooks Online. It also includes details about excluding personal or duplicate transactions.

 

Once done, you're now ready to do your very first reconciliation in QBO. I'd recommend performing this process every month to effectively monitor the growth of your sister's business and make sure your data matches with the real-life transactions. You can refer to the article for the complete details: Reconcile an account in QuickBooks Online.

 

Also, I'd recommend visiting or joining the QuickBooks Community for accountants and bookkeepers. This way you're able to get in touch with other accounting professionals and receive recommendations to broaden your experience.

 

Let me know if you have other banking concerns or inquiries about managing and reconciling transactions in QBO. I'm just around to help. Take care always.

TenVit
Level 2

QBO - Connecting Bank Account and OBE Adjustment

@Rea_M,

 

Thank you for your detailed information. I attempted to do what you suggested, but in her bank Register, there is an OBE dated bake in 4/27/2020 and it is reconciled. Can I still update the OBE even though it is already reconciled? I kind of think I know the answer, but still would like guidance on it before I do it.

A bit more back story. She use to have a QBO simple start acct. But once I decided to do her books for her, I created a new acct under my Accountant acct and put her on QBO Plus. So it looks like the bank feed from her previous subscription transferred into these books. 

Thanks

Rasa-LilaM
QuickBooks Team

QBO - Connecting Bank Account and OBE Adjustment

Thanks for adding more details about your concern, TenVit.


Yes, you can update the opening balance equity even if it’s reconciled. Before proceeding, I suggest consulting with an accountant for further assistance. This ensures you won't have any issues in the next reconciliation (opening balance).


If you’ll have to change the opening balance, I recommend following the steps shared by @Rea_M. I’m also adding some articles to guide you in the future. These resources contain solutions on how to resolve specific reconciliation concerns in QBO.

 

 

If you have any other QuickBooks concerns, click the Reply button and add a comment. Please know the Community has your back, and I’m here to assist further. Wishing your business continued success.

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