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About reconciling your accounts

As you write checks, withdraw money, make deposits, and incur bank charges, each of these transactions should be recorded in QuickBooks and then "matched" with the bank's records. This matching process is called reconciling. Reconciling your accounts is a key step to ensuring the accuracy of your accounting records.

Reconciliation in QuickBooks occurs within two windows: the Begin Reconciliation window and the Reconcile window.

Beginning your reconciliation

Some things you may want to consider before you begin your reconciliation:

  • If this is your first time reconciling this account, make sure you've added all your transactions and your opening balance is correct.

  • If your beginning balance is different from the balance on your current paper statement, you may need to track down the discrepancy before you reconcile. Click Locate Discrepancies in the Reconcile window to find out how to do this by viewing different types of reports.

Follow these steps to start your reconciliation.

Reconciling your account—matching the balances for your paper statement and QuickBooks account—is a two-step process in QuickBooks. First you'll compare the beginning balance on your bank statement to the beginning balance in QuickBooks, and make sure the information for the account you want to reconcile in QuickBooks is correct. Then you'll compare individual transactions and reconcile your account.

Note: If you clear a transaction directly in the account register, the beginning balance shown in the Begin Reconciliation window may not match the opening balance on your statement. Instead, clear transactions when you reconcile in QuickBooks so you start each reconciliation with a more accurate beginning balance.

To do this task

  1. Choose Banking > Reconcile to open the Begin Reconciliation window.

  2. In the Account field, enter or select the account you want to reconcile.

  3. In the Statement Date field, enter the date of the bank statement you are trying to reconcile.

  4. Compare the amount shown in the Beginning Balance field to the opening balance amount shown on your statement.

    If the opening balances are different

    When you open the Begin Reconciliation window and select an account to reconcile, the opening balance displayed doesn't match the ending balance from your previous reconciliation.

    Why this is happening

    This issue can occur for several reasons:

    1. If this is the first time you're reconciling this account, either no balance was entered or an incorrect balance was entered.

    2. You may have voided, deleted, or changed the amount of a previously cleared transaction since your last reconciliation.

    3. Occasionally, the company data file may be damaged (this isn't common).

    How to fix it

    To resolve this issue, do one of the following:

    • If this is the first time you're reconciling this account, correct the opening balance for the account.

      If the opening balance is zero, enter the opening balance for the account.

      If the opening balance is an amount other than zero, change the opening balance for an account in use.

    • If you think you've voided, deleted, or changed the amount of a previously cleared transaction, correct the edited transactions.

      To help you find the edited transactions:

      1. Run a Reconcile Discrepancy report.

        1. Choose Reports > Banking > Reconciliation Discrepancy.

        2. Select the appropriate account and click OK.

        3. Use this list of transactions to identify the transaction(s) causing the problem.

          Note: This report provides a list of transactions that were changed since the last reconciliation.

        4. If you find a discrepancy, note both dates:

          • The transaction date is the date when the transaction occurred.

          • The Entered/Last Modified date tells you when the change occurred.

      2. Run a Previous Reconciliation report.

        1. Choose Reports > Banking > Previous Reconciliation.

        2. Select the appropriate account, select the statement ending date, and click Display.

        3. Compare this report to past statements from your financial institution and look for differences.

      To correct the discrepancy, you may need to:

      • Enter missing transactions.

      • Edit existing transactions.

      • Undo a previous reconciliation and redo it.

      • Ignore the discrepancy and let QuickBooks enter an offsetting adjustment.

      • Contact your financial institution about a banking error.

    • If you've previously reconciled the account without problems and haven't made any changes to previously cleared transactions, it's possible you have data damage. Run the Verify Data utility followed by the Rebuild Data utility to correct the damage. You may also need to troubleshoot your company file for damaged transactions.

    Still having problems? Visit the QuickBooks support site to search in-depth support articles or get help from a QuickBooks Support Representative.

    See also

  5. Find the ending balance on your statement and enter it in the Ending Balance field.

  6. Enter any service charges or interest earned that you have not already accounted for in QuickBooks.

    • If the financial statement shows a service charge or interest that you haven't yet entered into your QuickBooks records, enter those amounts into the Service Charge and Interest Earned fields.

    • Important: Don't enter charges you have already entered as QuickBooks transactions.

    • In the Account field for service charges, enter the name of the expense account that you use to track service charges. In the Account field for interest, enter the name of the income account that you use to track interest income.

  7. Click Continue to open the Reconcile window for the account you've chosen.

  8. Finally, complete your reconciliation.

See also

Completing your reconciliation

The Reconcile window appears after you finish reviewing the information in the Begin Reconciliation window and click Continue. Here is where you can refine the choices you want to match against your bank statement.

If you'd like to see fewer columns or add columns, click the Columns to Display button and modify accordingly.

Follow these steps to complete your reconciliation.

Reconciling your account—matching the balances for your paper statement and QuickBooks account—is a two-step process in QuickBooks. First you'll compare the beginning balance on your bank statement to the beginning balance in QuickBooks, and make sure the information for the account you want to reconcile in QuickBooks is correct. Then, you'll compare individual transactions and reconcile your account.

To do this task

  1. You should have completed all the steps to begin your reconciliation.

  2. When you find a transaction in the Reconcile window that matches a transaction on the statement, click the transaction to mark it as cleared.

    • For each transaction you select, verify that the amount in the Reconcile window matches the amount shown on your statement.

    • If some amounts don't match or if you find transactions that contain other errors, correct the transactions.

    • If you find a transaction on your statement that is not shown in the QuickBooks list of uncleared transactions, enter the transaction now.

  3. (Optional) Click the Modify button if you want to return to the Begin Reconciliation window so that you can change some of your entries.

  4. (Optional) If you are trying to look at a particular transaction on the list, click the Go To button to see details.

  5. When you've finished selecting the transactions, look at the difference amount in the bottom right corner of the Reconcile window:

    • If the amount is 0.00. Click Reconcile Now. You've reconciled the account with the statement. At this point, you can have QuickBooks print a reconciliation report.

    • If the amount is not zero. Your account does not balance for the period of time covered by the statement, and you need to correct the difference or, if the difference is not significant, reconcile anyway and QuickBooks will enter an adjustment for you.

See also

Continuing your reconciliation later

If you start reconciling and realize you don't have all of the information you need, you can leave the reconciliation and finish later. QuickBooks will keep track of what you've selected so that you can finish later.

Follow these steps to save your reconciliation and come back and finish it later.

You can work in other windows to correct errors in an account while leaving the Reconcile window open. But if you click Leave, QuickBooks will keep track of what you've selected so that you can finish later.

In the account register, an asterisk (*) is displayed in the cleared column of the transactions you marked until you complete the reconciliation. The asterisk indicates that a transaction is pending because you haven't finished reconciling your QuickBooks account with your financial statement.

  1. To resume reconciling, go to the Banking menu and then click Reconcile.

  2. In the Begin Reconciliation window, re-enter your ending balance and any amounts you entered for interest or service charges.

  3. Click Continue to open the Reconcile window again. The items that you previously selected are marked with a checkmark.

  4. Select any other items you want to include, then click Reconcile Now.

Common questions about reconciliation

Reconciling your account—matching the balances for your paper statement and QuickBooks account—is a two-step process in QuickBooks. First you'll compare the beginning balance on your bank statement to the beginning balance in QuickBooks, and make sure the information for the account you want to reconcile in QuickBooks is correct. Then, you'll compare individual transactions and reconcile your account.

To do this task

  1. You should have completed all the steps to begin your reconciliation.

  2. When you find a transaction in the Reconcile window that matches a transaction on the statement, click the transaction to mark it as cleared.

    • For each transaction you select, verify that the amount in the Reconcile window matches the amount shown on your statement.

    • If some amounts don't match or if you find transactions that contain other errors, correct the transactions.

    • If you find a transaction on your statement that is not shown in the QuickBooks list of uncleared transactions, enter the transaction now.

  3. (Optional) Click the Modify button if you want to return to the Begin Reconciliation window so that you can change some of your entries.

  4. (Optional) If you are trying to look at a particular transaction on the list, click the Go To button to see details.

  5. When you've finished selecting the transactions, look at the difference amount in the bottom right corner of the Reconcile window:

    • If the amount is 0.00. Click Reconcile Now. You've reconciled the account with the statement. At this point, you can have QuickBooks print a reconciliation report.

    • If the amount is not zero. Your account does not balance for the period of time covered by the statement, and you need to correct the difference or, if the difference is not significant, reconcile anyway and QuickBooks will enter an adjustment for you.

See also

See also

KB ID# H_RECON_RECONCILE
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