Reconciliation Discrepancies

@Dee-Nice 

"There are deposits that were cleared but are not in bank statements."

You will need to reverse those deposits with an expense or check transaction in the current month.  Assign the same account to the check/expense that was used on the deposit transactions cleared in QB that never hit the bank account. 

"Also, there are deposits that are dated the prior month in QBs, but are in the current month bank statement and was cleared in current month... I really don't want to unreconcile the past 4 months BUT I have a feeling I am going to have to in order to correct all of this. Any thoughts?"

That's normal.  Deposits often hit the bank account in a month following the month they are dated in QB.  Is there something I'm missing?  

I would understand if the bank would take about 1 to 2 days to process a deposit but… Let me give you an example; March bank statement was reconciled. Reviewed the reconciliation detail report and found deposits that were dated in February 26th, 27th or 28th, but on the bank statements, these deposits didn’t happen until March 24th… SO why would the previous office person think it is ok to clear deposits with wrong dates? I have an idea as to why they would do this and it’s WRONG. I am leaning towards unreconciling this entire year and changing dates to reflect CORRECT deposit dates and reconcile accurately. 

@Dee-Nice 

"SO why would the previous office person think it is ok to clear deposits with wrong dates? I have an idea as to why they would do this and it’s WRONG."

They way they did it doesn't need to be fixed IMO.  If you know all of this, forgive me.  It really depends on how the deposits are being recorded in QB and whether the business is on cash or accrual basis.  The only reason I see to change the deposit date is if they use undeposited funds.  But, even then, it really doesn't matter since the balance sheet will show the cash in the bank account vs. undeposited funds.  Both are listed in the asset section of the balance sheet.    

If they don't use undeposited funds, then the date of the deposit will be the same date as the payment received date, regardless of when the actual deposit is made and you don't want to "fix" that because what matters from an accounting (and the IRS's) perspective is the date you receive the money without restriction.  It's what's known as 'constructive receipt'.  So, if they aren't using undeposited funds, and the deposit sits around the office for a few weeks, there's going to be a discrepancy between the deposit date in QB and the deposit date on the bank statement.  If the business is on cash basis and you change the deposit date, you could potentially be shifting income.  For example, say your client received an invoice payment of $10K on Dec. 15, and didn't use undeposited funds but recorded the payment receipt as deposited directly into the bank account.  They got lazy and didn't deposit the check until Jan. 5.  If the client is a cash basis taxpayer, changing the deposit date from Dec. 15 to Jan. 5 will shift the $10K in income to January, thereby under-reporting their income for the year.  That income and deposit should both be booked on Dec. 15.  So, bottom line, I can't see any reason to "fix" this.