Let’s review bank reconciliation in QuickBooks Online (QBO). It’s very similar to the process in QuickBooks Desktop. But there is a significant difference.
Bank transactions import into your QBO directly from your bank account. We examined that process last month.
Some people prefer not to enter bank information manually. They want to use electronic transfers and/or debit cards. These transactions then download into their accounting software, QBO.
There is the occasional edit to be sure a downloaded transaction posts to the right account. But there’s really very little manual data entry.
That doesn’t work for everyone. Some QBO users still need to enter that data.
Checks written, bill payments to track, and so on. They want the reduction to the bank balance to show now, not when the transaction hits the bank.
So what are the benefits?
If you enter all your banking transactions manually, why do you care if QBO imports directly from your bank account?
As the opening line in this post said, let’s look at reconciliation.
The above screenshot shows the transactions that downloaded from the bank. The lower arrow points to those QBO has already matched. You can see the green “match” symbol.
These can all be accepted, entire batches at a time, with a couple of mouse clicks. Simple.
The others, the ones indicated by the upper arrow, do not exist in QBO now. Those will have to be edited so they post to the correct expense account.
Still, you can see the rapid procedure for matching transactions.
We’ll complete this process as a step one. It will take a few minutes at most.
Above is a screenshot of the check register after the downloaded bank transactions have been matched or entered.
Note the green icons next to the “C” designation. These transactions were either matched or entered from the bank downloads. Those that have no such designation have not been matched to a corresponding bank transaction.
The “C” indicates this transaction has cleared the bank, but has not yet been reconciled.
Above is a screenshot of the reconciliation window.
Click on the gear icon and select Reconcile from the Tools section. You will first be asked what account you wish to reconcile, the bank or credit card statement date, and the ending balance.
It is a good practice to check the box highlighted in the upper right part of the window. This causes QBO to only show the relevant transactions, those dated on or before the statement date.
The green icons indicating the transaction has been matched with the bank show in this window as well. If all the transactions had been matched, there would be no hunting and scrutinizing of the bank statement to match them in this window. QBO has already done that.
Once the transactions listed in the window are marked as cleared to match those shown on the statement, the Difference field, which appears in the bottom central section of the screen should be zero.
At that point, you can click Finish Now.
Above is another screenshot of the check register. This one though is after the reconciliation has been completed.
The “C” designation, indicating a transaction had cleared the bank, is replaced with an “R” designation if that transaction had been reconciled in the bank reconciliation window.
Hector Garcia, CPA
Certified Advanced QuickBooks ProAdvisor
12401 Orange Drive #136
Davie, FL 33330
954-414-1524
hector@garciacpa.com
2 Responses
Why is it that some transactions come in from bank as expense when there is also a check for that transaction? Thank you
you can choose either