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Reconciliation in QuickBooks: A Complete Guide

When your company deals with multiple transactions and numbers, you start getting small mistakes and inconsistencies. Here comes the role of Quickbooks Reconciliation into play. This process is matching the bank transaction with those you have entered in the QB software. Reconciliation in Quickbooks software is used to connect bank accounts to your company’s cash account. Through this process, you can identify if any of your client’s checks have bounced, or your issued checks have been tempered or stolen or paid without your permission.

This process also helps you in detecting any fraud. Therefore, to prevent any fraud or issues like Quickbooks won’t open, make sure you reconcile the bank accounts timely. Do it at the same time as you receive the bank statements.

In this post, you will learn the process of Quickbooks reconciliation with the easiest steps. But before that, let’s learn its importance and why you should never skip it.

Importance of Quickbooks Bank Reconciliation

Bank reconciliations in QuickBooks are super important because, through this process, you can verify that both the amount and transaction numbers are accurate. For restoring the data in the event that the company file becomes corrupted or lost, you can utilize the Quickbooks auto data recovery tool. All in all, bank reconciliation in QB will help you achieve three goals:

  • The QB transactions happened: In the software, sometimes a transaction is created mistakenly. If it involves your bank account, then the reconciliation process will detect a fraudulent transaction.
  • Transaction values are appropriate: Not only does bank reconciliation guarantee that transactions appear on both Quickbooks as well as bank statements, but it also verifies that they are correct. Remember, the amount should be exact.
  • All bank transactions are recorded properly: Quickbooks bank reconciliation guarantees that all your bank account transitions are accurately recorded in the system.

Reconciliation in QuickBooks - Detailed Process

Let’s learn how you can perform reconciliation in Quickbooks in just 5 steps.

1. Open QBO, Click “Bank Reconciliation”

Here, click “Accounting”. After that, hit “Reconcile”.

2. Select a Bank Account That You Want to Reconcile

  • Account: Select your account for the process.
  • Beginning Balance: Agree to it.
  • Mismatched Beginning Balance: After entering the transaction, ensure you put correct values in the QB as well. This is done to match both account and QB balance.

After this QB will show a warning along with a link to detect the previous changed reconciled transactions.

  • Ending Balance: Enter the ending balance from your statement.
  • Ending Date: Provide the statement duration’s ending date.
  • Service Charge: Input, date, amount, and expense, same as the statement.
  • Interest Earned: Input the interest you obtain on your bank balance.
  • Once done, hit “Start Reconciling” to proceed.

Sometimes Quickbooks won’t open while doing the process. In this situation, just restart your PC.

3. Begin Matching Transactions

QB reconciliation screen displays the detailed summary and transactions list. Start matching them.

Cleared Transactions Summary: Beginning balance - payments cleared + deposits cleared will show the cleared balance.

The total transactions with a radial button are your payments and deposits. There you will see the difference between the statement ending balance and cleared balance. To complete your reconciliation, this difference must be zero.

List of Transactions: This section has the uncleared QB transactions. Any transactions not cleared in the present month appear again the following month.

Radial Buttons: Click this button on the right side of the transactions to show the transaction under cleared activity summary.

Problems Tracing Deposits: Your bank statement will include deposits with several checks in one translation. If each client check shows a separate deposit in QB, the software will have a difficult time tracing the deposits. So, when depositing client checks in the future, only do it using undeposited fund accounts.

4. Check QB Bank Reconciliation Has A Zero Dissimilarity

Once you match the bank and QB bank statement transactions, you should see a Zero difference. Ensure that you finish the process with 0 difference only to prevent any Quickbooks bank reconciliation issues in the coming month.

After you bring the difference to 0, click “Finish now” for concluding the reconciliation. In case, the Quickbooks won’t open again, then reboot the PC right away.

5. Review and Save QuickBooks Bank Reconciliation Reports

Once you reach here, the next thing is reviewing and saving the reports. The QB software will send you a link to verify the QB reconciliation report:

Click “View Reconciliation Report”. The report then will display summary details and other info like deposit checks, outstanding or unpaid checks. You get these under “Additional Information”.

Review the reports every month to ensure that the transactions are making sense. Be particular about older checks. Contact vendors and employees to ask them if their checks require re-issuance. Quickbooks bank reconciliation is completed once you have reviewed all the details about uncleared transactions.

Final Words

Bank reconciliation in Quickbooks is an electronic balancing of the bank accounts. Through this, you can easily detect any suspicious or unauthorized transactions happening in your bank account, which are not noted in the software. So, this is a crucial step for your company.

Lastly, we hope that through this article, you learned all about QuickBooks Reconciliation and ways to perform it accurately.

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