Learn how to reconcile an account in QuickBooks to keep them balanced and accurate:
Just as you balance your checkbook, it’s necessary to review your accounts in QuickBooks to be certain that the details do not mismatch with actual credit card and bank account statements. You should reconcile all your accounts at least once a month. Compare the transactions, after you receive your statements, with the entry you made in QuickBooks. Your accounts are balanced and precise if everything matches. Reconciling is basically a process of matching transactions that a user entered in QuickBooks with the banking or credit card company’s record.
This article is created to help you learn and understand how to reconcile an account in QuickBooks Desktop so they match your credit card and bank account statements. So, if you are looking for such a process, then make sure to read the article carefully. Moreover, you can also contact our technical support team via our toll-free number i.e. +1-844-521-0490.
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The significance of Reconciling an Account
You can manually keep a track of the transactions and balances in your checking, saving and credit card accounts. But that can be time consuming and errors may occur. And that’s why reconciling is important. Without reconciling, you may not be certain of the balance in your accounts. For example, if you want to know the availability of cash – reconciled accounts would provide you with the most accurate numbers.
- QuickBooks desktop accounts all transactions such as payments, deposits, and bank fees.
- Transactions in the QuickBooks bank register, as well as the ending balance, the user should match what they have in their actual bank account.
Points to remember
Before carrying out the reconciliation steps, the user needs to carry out the activities below:
- Backup the QuickBooks company file
- Ensure the bank or the credit card account in QuickBooks has a correct beginning balance
- Entering all uncleared transactions for the statement period
- Also, keep the record of the bank or the credit card statement
Now, let’s learn how to reconcile your accounts in QuickBooks.
Steps to Process Reconcile an account in QuickBooks Desktop?
Below we have provided some of the easy steps to reconcile your accounts so they match your bank and credit card statements:
Step 1: Review your opening balance
In case it is the very first time that you are reconciling an account, then make sure to review the opening balance. It should be noted that the opening balance of the real-life bank account for the respective day to begin tracking the account in QuickBooks.
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Step 2: Prepare for the reconciliation
In this step, the user needs to ensure that you enter all transactions for the bank statement period the user is planning to reconcile. In case there are transactions that are not cleared by the bank and are not on the statement, then wait for them to be entered.
Step 3: Start your reconciliation
Start with the following steps to begin reconciling your account:
- Go to QuickBooks Desktop and click on the Banking menu.
- Choose the Reconcile menu option and tap on the Account drop-down menu and then select the account you want to reconcile.
- Find the bank statement you’re using to reconcile your account and then the statement end date. Put in this end date into the respective field in QuickBooks.
- QuickBooks also automatically enters the beginning balance. It uses the ending balance from the last reconciliation to get this number. The user needs to ensure that it matches the beginning balance on the bank statement.
- In the ending balance field, the user needs to enter the ending balance as it appears on the bank statement.
- In case the bank statement shows a service charge or interest that the user didn’t enter into QuickBooks. The user needs to enter the amounts in the service charge and interest earned section. Also, do not enter charges already entered in QuickBooks
Review the list of transactions in QuickBooks on the next page. For every entry that matches with your statement, tap on the transaction in QuickBooks. If you click every item in the list and the difference at the bottom of your screen is zero, there is no discrepancy! Next, click Reconcile Now and your account would be reconciled.
In case there is a difference in what is displayed in QuickBooks and what is listed on your statement, you can do the following to fix the error.
- Check if the transactions were entered correctly in QuickBooks. If you find that an item causing the difference is a check from a vendor, contact the vendor and ensure that the check was provided and deposited.
- If there’s a wrong transaction in QuickBooks accounting software that’s behind the discrepancy, do a right-click on the transaction and choose Void in remove the transaction.
- If the difference is caused by a deposit, check if that has been mentioned twice or the same is included a part of another deposit.
Reconciling your accounts may give you a better and clear picture of your organization’s cash flow. It’s not rare for a business owner to find that a few unpaid invoices. At the same time, expenses may go up. Reconciling your accounts in QuickBooks can help you avoid these inauspicious situations.
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Why user should undo the last reconciliation?
When the user cannot locate discrepancies during reconciliation, then he/she might need to undo the last reconciliation.. It takes previously clear transactions as unclear when the user undo the reconciliation.
The reconcile screen
The user can refine the choices on this screen to match against the bank statement. Also, select transactions to clear. In case the screen shows no difference, then click on reconcile tab and you are done.
- Hide the transactions after the statement end date checkbox: The user can put a heck mark in the box, to display the transactions covered only by the statement period you are working on. This will help the user to remove the clouds of confusion, when you are behind in the reconciliation process.
- List of transactions entered in QuickBooks: The user will have two sections- checks/payments and deposits and other credits. If the user is reconciling a credit card, then the sections are charges and cash advances and payments and credits. The user should validate the transactions against what they have on the bank or credit card statement. After that click only the ones that are seen on the statement and also make sure that the amounts are the same. The user should be able to notice that as the transactions are selected, the cleared balance will change.
- Items user has marked cleared: This section shows the total number and the total amount of deposits and checks selected. A few banks offer a similar summary of transactions on the statement. This will save time, in case the user requires to check any possible discrepancies.
- Mark all/ unmark all options: The user needs to click any of the two tabs to select or deselect the transactions. Selecting all together will save time and the user needs to ensure that the reconcile window shows no difference between the ending and clearing balances.
- Go to option: The user needs to click on the tab to open the transaction from the reconciliation window. It will help the user to make minor modifications to the transaction
- Matched option: If the accounts that the user reconciles is set up for the bank feeds, then this tab will select all the transactions downloaded and auto matched automatically.
- Columns to display option: The user needs to click this tab to select the fields to be displayed
- Modifying option: This tab should be selected if they have last minute changes to the information that was entered in the begin reconciliation window.
- In this section, the user will have a check on reconciliation figures, which includes service charge, cleared balance, and difference
- Leave option: This tab should be used to move out of the reconcile window to work on another account or to edit transactions.
- Reconcile now tab: If the user has completed with the selection process, this tab should be opted
Review the reconciliation
Once the user reconciles the account, he/she needs to select the display option to see the reconciliation report or print to print it.
In order to review a reconciliation report later on, the steps below can be carried out:
- The very first step is to move to the reports menu and choose the reports center.
- After that the user needs to search for and open a previous reconciliation report.
- And lastly, choose the account that you reconciled earlier and then select either of the options i.e. detail, summary, or both.
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Conclusion!
We hope you find this blog post helpful in understanding the process and significance of reconciling an account in QuickBooks. If you have any questions or you want to learn more about making the best use of reconciling an account in QuickBooks, you can contact our 24×7 QuickBooks enterprise support team. All you have to do is to call us at our toll-free number i.e. 1(844)521-0490 and our experts will be happy to help you.
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