How to reconcile in QuickBooks: Step-by-step

Make sure you’re using the very first bank statement for that account. You may have to go back many months and then move forward, reconciling one month at a time. If it’s impossible to start your reconciliation in the first month of the bank account, you might need an experienced bookkeeper to help with your first reconciliation to get you on track. The top of the report will display summary information similar to the top of the reconciliation screen. Perhaps the most useful information on the report is the list of uncleared, or outstanding, checks and deposits, which you’ll find at the bottom.

Check For Duplicate Transactions

For example, if you pay your vendors with a check run on the last business day of the month, none of those checks will have cleared the bank by the time you’re ready to reconcile your account. While outstanding checks don’t require an additional journal entry, since they’re already recorded, you will want to subtract them from your ending bank balance to reconcile the balance with your general ledger. You now know how to process bank reconciliation in QuickBooks Online. The next lesson in our tutorial series is on managing downloaded credit card transactions in QuickBooks Online.

Step 2: Select the Bank Account to Reconcile

1. Access your cash flow statement, balance sheet, and profit and loss statement in just a few clicks.
2. If your difference is, for example, $21.50, then look for a transaction for this amount on either your bank statement or the QuickBooks list of transactions.
3. For illustration purposes, here is a bank statement from a fictitious bank called First Capital Bank.
4. You will, however, want to regularly reconcile any short-term or long-term liability (loan) accounts to make sure the principal due and the interest paid are correctly accounted for in QuickBooks.

You’ll want to look at your statement, starting with the first transaction listed and find that same transaction in the Reconciliation window in QuickBooks. Eric is an accounting and bookkeeping expert for Fit Small Business. He has a CPA license in the Philippines and a BS in Accountancy graduate at Silliman University. We don’t have any interest earned, so we’re skipping that part. But if you encounter interest revenue in your business’ bank statement, include the amount as interest earned and choose the appropriate account.

Reconciling accounts is easier using QuickBooks Online

The vendors deposited the checks to the bank, which resulted in a deduction in the bank statement beginning balance. Automate fraud detection, bank reconciliations or accounting processes with a ready-to-use custom workflow. Reconciling statements with your QuickBooks company file is an important part of account management.

Particularly in the context of QuickBooks Online, mastering the process of running this report is essential for maintaining a clear understanding of your business’s financial health. When you have your bank statement in hand, you’ll compare each transaction with the ones entered into QuickBooks. We recommend reconciling your checking, savings, and credit card accounts every month.

Step 4: Fix the Error

Book transactions are transactions that have been recorded on your books but haven’t cleared the bank. As a small business, you may find yourself paying vendors and creditors by issuing check payments. Note that this process is exclusively for reconciliations performed by hand.

To successfully reconcile your transactions against your bank statement, the difference between the ending balance and cleared balance should be zero. If the difference isn’t zero, we have troubleshooting tips to help you locate the discrepancies. Reconciling bank accounts in QuickBooks Online follows a similar process. However, it will be a little bit easier since QuickBooks Online will pull up your check register automatically.

We recommend reconciling your current, savings, and credit card accounts every month. Check out our complete reconciliation guide to understand the full workflow. Jill and Bob recently handed their books off to their tax accountant, who just happens to know how to use QuickBooks sample invoice template Online (Isn’t that a coincidence?). After a quick glance at their QBO, the accountant, Caroline, asked why they didn’t reconcile their business’ bank accounts. Baffled by this question, Jill and Bob told Caroline that they did reconcile all of their bank accounts.

Once connected, all bills in QuickBooks Online will sync in real-time with Wise. Bill payments are automatically synced, matched, and categorized in QuickBooks. It can also help with account audits and tax preparation by catching errors early. Frequent reconciliation is important to ensure your QuickBooks accounts remain accurate.

When you reach the end of your transactions, the difference between your statement and QuickBooks should be CA $0.00. The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, what is the main disadvantage of accrual accounting or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. If your sidebar menu is not what is shown in our tutorial, it means that you are on Business View. We prefer and recommend using the Accountant View because it shows a full range of business accounting features and tools that you can use in QuickBooks.

Reconciling bank balances monthly is an important internal control over cash. Before you start reconciling bank accounts, get your bank statement, check register, the purpose and content of an independent auditors report and previous bank reconciliation statement first. Reconciling a bank statement is an important step to ensuring the accuracy of your financial data.

If you are looking to automate your bank reconciliation process, set up a demo call with our experts to automate your workflows using Nanonets. If the difference is not zero, you must identify the transactions that aren’t recorded in QuickBooks. This can be due to accounting errors, unaccounted charges, or unauthorized transactions.

Investigate the cause of the error by carefully double-checking your transactions and fixing the reconciliation again. You will, however, want to regularly reconcile any short-term or long-term liability (loan) accounts to make sure the principal due and the interest paid are correctly accounted for in QuickBooks. The process for reconciling these accounts is the same as the process for reconciling a bank or credit card account, and it typically takes only moments to do. In other words, there’s no need — or even any purpose — to reconcile accounts like fixed assets or intangible assets unless there is an outside document you can refer to for reconciliation. Even then, you’ll likely only reconcile non-bank accounts once a year, as in an inventory reconciliation. Remember, after undoing a previously reconciled transaction, you may need to re-reconcile to keep your books accurate.

If you use accounting software, then your reconciliation is done largely for you. However, as a business owner, it’s important to understand the reconciliation process. After reconciling the bank accounts, the true cash balance available to spend is $12,490. The check register above shows that Paul’s Plumbing issued seven checks to vendors (101, 102, 103, 104, 105, 106, and 107). The only checks that appear in both the check register and bank statement are check numbers 101, 103, and 105.

If the difference isn’t zero or you don’t have time to clear all of the listed transactions at once, you can save your work and come back to it later. To save, click Save for later and select “Save for later” from the drop-down menu. This could be a reconciliation you’ve just completed, or it could be a reconciliation from a previously closed month.