How to Reconcile your bank in QuickBooks Online?

When you are reconciling a bank or credit card account, you can compare the beginning balance and all the transactions listed within your QuickBooks company file compared to the monthly statements created by your bank or credit card company and there you could make sure they match.

When done, your books and bank should agree with each other and be “reconciled”… the only difference would be open checks that have not cleared yet on that month

It’s similar to the idea of balancing a checkbook, when you review your bank statement to make sure it matches the numbers recorded in your checkbook. At the end fo the day, you know your available balance for that period and you also identify any pending discrepancies (such as unknown charges).

So, why reconcile?

When you reconcile your accounts monthly, you will:

• Know your books are complete (maybe not entirely “correct”, as that is a more subjective term)
• Simplify tax time by enhancing confidence in your books
• know if your customers are paying you, and also pay your own bills on time to avoid late fees and unhappy vendors/suppliers
• Can take fast, informed, and decisive action when you see discrepancies in your banking
• Can catch bank errors that could cost you money, such as the wrong amount being deposited deposit with multiple checks
• Enable your accountant to give you best possible advice about business, and not “bookkeeping”
• Possibly detect fraud by employees, accounting professionals, or vendors before it becomes unmanageable

We recommend that you reconcile your bank or credit card account when you get the statement from the bank at the end of the period (most of the times is monthly). But, if you’ve never reconciled or you do it regularly, You need to start with the oldest bank statement that hasn’t been reconciled, and do each one at the time (Plus keep going until your reach the most recent statement). The farther back, the most likely you are to potentially uncover any discrepancies or accounting errors. You will compare the monthly bank statement with the registered transactions within QuickBooks.. and that difference between them should be ZERO!

Enter your statement info and check the beginning balance

1. Select the Gear icon at the top, then Reconcile.
2. Select Reconcile Now.
3. Select the Account you wish to reconcile. Depending on the type of account you select, different statement info fields below
4. If the account was reconciled before, look below the Ending date field at the last statement ending date.
5. Make sure you’re reconciling the following month’s statement.
6. Confirm the beginning balance on your statement matched the beginning balance in QuickBooks Online.
7. Enter the statement Ending balance and Ending date.
   • If you aren’t prompted to enter the ending balance or statement date, you already have a reconcile in progress for that account. You can edit the ending balance or ending date by selecting Edit info once you’re in the Reconcile module.
8. Enter any additional information requested. If your statement doesn’t have an amount for one of these additional fields, you can leave it blank.
   • If you’re attempting to reconcile an account that is connected to online banking, the Service Charge, Interest Earned and Finance Charge (credit cards) fields are no longer displayed, as these entries are downloaded automatically.
9. Select Start reconciling and continue with the steps below.

Verify all transactions are captured

Ensure the total number of transactions for each transaction type between your statement and QuickBooks Online matches. If they don’t match, follow the steps below:

• If the number of transactions is off by one, the difference amount at the top of the Reconcile window might be the same as the transaction you’re looking for. You can use the filter to search for that amount.
• If your statement has more transactions than QuickBooks Online, look for:
  • A transaction that wasn’t marked as cleared (given a checkmark)
  • A transaction that wasn’t entered in QuickBooks Online
  • A deposit that was entered as a payment or a payment as a deposit
  • A charge that was entered as a deposit or a deposit as a charge
  • A transaction that is dated after the statement end date
  • A transaction that was entered in a different account by mistake
  • Foreign transaction fees
• If your statement has fewer transactions than QuickBooks Online, look for:
  • A transaction that was mistakenly marked as cleared
  • A transaction that was entered twice in QuickBooks Online
  • A deposit that was entered as a payment or a payment as a deposit
  • A charge that was entered as a payment or a payment as a charge
  • Bank charges that were entered and selected twice

Mark transactions as reconciled in QuickBooks Online until the difference is zero

1. On the account statement, find the first transaction, then find the same transaction in the Reconcile window and make sure it’s correct.
   • Select the transaction if its correct.
   • If a transaction amount is incorrect, select it and manually adjust the amount in QuickBooks Online. Select the transaction once corrected.
2. Repeat for each transaction listed on your statement.
3. After reviewing all transactions, look at the difference at the top of the Reconcile window.
4. If it equals zero, you’re done! Select Finish now from the drop-down at the top right.