It’s probably one of the most-loathed accounting tasks, but it has to be done.
It seems like it should be such a simple process. It’s basic math, after all, and you’re conscientious about keeping up with your bookkeeping. When your statement comes, you:
- Open the Banking menu and click Reconcile.
- Make sure the account and statement date are correct, and that the beginning balance on your statement matches the one that QuickBooks displays.
- Enter the ending balance from your statement and any bank service charges and interest payments. If desired, enter a QuickBooks class. Click Continue.
The easy part: making sure that your beginning reconciliation screen contains the correct information.
The next screen lists all of your QuickBooks transactions since the last reconciliation. Match those to the transactions listed on your statement and click in the column labeled with a check mark to indicate that they’ve cleared. Use the buttons at the bottom of the screen to speed up the process or go to an original transaction in QuickBooks.
Click Reconcile Now. QuickBooks will indicate whether there are any discrepancies between your statement and the transactions you selected.
Oops. Something went wrong. You have three options here.
Don’t be too alarmed if your reconciliation isn’t successful the first time, especially if you have a high volume of transactions.
You can do one of three things at this point:
- Go back to the previous screen (Return to Reconcile).
- Come back later to work on it (Leave Reconcile).
- Let QuickBooks enter an adjusting entry (Enter Adjustment).
What is the best way to proceed, and how can you better manage your accounts and their reconciliation to avoid having frequent discrepancies? Here are the kind of tips you would get in a QuickBooks training course:
- It’s not a good idea to have QuickBooks “fix” your account by entering an adjustment, unless the discrepancy is miniscule. Try to find your error(s) to avoid compounding the problem.
- If you return to the previous screen, see if you can find any transactions that appear on your statement but are not in QuickBooks.
- Use QuickBooks’ sorting tools. Click on the CHK# column label for checks and TYPE and AMOUNT for deposits and other credits. This can save a lot of time.
Save time by displaying related entries.
- Click the Locate Discrepancies button in the Begin Reconciliation window if your opening balances don’t match before going on. You’ll get access to two reports that may help you.
- Be sure that you selected the correct account.
- Double-check your QuickBooks transactions to see if you either transposed a number or categorized transactions incorrectly (checks, deposits, etc.).
- When you locate a transaction on your statement that doesn’t appear in QuickBooks, go to your Chart of Accounts (Lists | Chart of Accounts) and double-click the correct account. Scroll down to the first blank line, enter the transaction and click Record. Return to the reconciliation screen and mark it as cleared.
- If you use online banking, perform a download before you start reconciling.