When you are reconciling Bank or Credit card account, you can compare the beginning balance and transactions listed within QuickBooks company file with the monthly statements from the bank or credit card company and ensure they match. Fully reconciled and matching transactions mean that everything is matching in the bank and books statements, with only uncleared Open Checks coming as a difference. QuickBooks Online Bank Reconciliation is a task with which you can match your QuickBooks transactions to ensure everything is in line.
What is QuickBooks Online Bank Reconciliation?
We reconcile books to know that books are complete, minimize tax calculation time, understand if the customers are paying you, can catch bank error, enable the accountant to provide the best advice about business, detect fraud by employees, accounting professionals, etc.
QuickBooks Online is a separate task in itself. All entered transactions in the QBO using forms, bank feeds, third-party data fetching app, etc. need to be reconciled with your bank account in QuickBooks Online.
Mostly, we reconcile the checks drawn or made, savings, credit card accounts, etc. Additionally, we might reconcile current asset accounts and other liability accounts.
Steps to do QuickBooks Online Bank Reconciliation
Follow steps for QuickBooks Online Bank Reconciliation-
Step 1 – Go to the Reconcile page
- You can access the reconcile module/page.
- First click ‘Accounting’ in the side panel on the left
- Now click reconcile, or from the ‘Gear menu’ Click ‘Tools’ and then ‘Reconcile.’
- You are at the ‘Reconcile Page’
Step 2 – Choose an account to ‘Reconcile’
Once you reach the ‘Reconcile page,’ then select the account that you are looking to Reconcile.
Click ‘Reconcile’ or ‘Resume Reconciling’
However, if you have started the QuickBooks Online bank reconciliation but observe that the account cannot be reconciled as off now means that we deleted/ modified a previously reconciled transaction. Hence, before reconciling the next month, you need to resolve it. Here you get an option to fix the under ‘ We can assist you in fixing it’ option.
There are few common mistakes that the user often performs and this messes up the QuickBooks Online Bank reconciliation. These are:
- Changing the date of a transaction
- Deleting/ voiding previously reconciled transaction such as a check or bill
- Change of source account of a previously reconciled transaction.
Hinder yourself from committing the above-written errors. If you want to erase something first check with your accountant as a wrong deletion might lead to discrepancies between the last reconciliation or even un-reconcile a previously reconciled transaction.
If you click on the ‘Fix it’ option, then there comes a box reflecting ‘Reconciliation Discrepancy Report.’ You can see this example below where someone forced reconciling as an expense by typing in ‘R’ in the extreme left checkmark column. Avoid doing this step as this will not reconcile transaction and will only cause the QuickBooks reconciliation discrepancy.
Change this back to ‘C.’
The problem is resolved, and you will come back to ‘Reconcile Page.’ Furthermore, observe that there are two blue links in the upper right window of the Reconcile page. You can see ‘Summary’ which is a list of previous reconciliations and when they get finished.
Moreover, ‘History of Account’ shows similar info as given on the ‘summary page,’ though includes changes/auto- adjustments to the previous reconciliations along with the ability to give out a ‘Reconciliation report.’
When you click on the ‘History by account’ you will view the below-given screen.
Click view report to have the Reconciliation report in front of you. The report is long, and you can check ‘hide additional info’ box to view data up-to-the statement ending date. This is helpful so that you don’t get confused with transactions dated past the date you are looking to reconcile.
Step 3 – Fill in Statement Information
- Go back to the ‘Reconcile Window.’
- Press on the ‘Reconcile’ link on the top right corner
- Now fill in the Statement Information
- There are three critical fields- ‘Beginning balance,’ ‘ending balance,’ and the ‘Ending date.’
- Fill in the month date for which you want to reconcile as the End date.
- Fill in the ending balance and beginning balance field will get auto-populated with the end balance of the prior month (May 2018)
- Click ‘start reconciling.’
Step 4 – Match & clear transactions
- Check this against the Bank statement. You can do this for all the transactions such as payments, deposits, etc. that come up in the Bank statement.
- Ensure to check as many transactions as possible. This will lower the difference between statement ending balance & cleared balance until you have a zero in the different field.
Step 5 – If required Apply filters so you can easily find transactions
Filters help in categorizing one item type whenever you want to look at a specific item. You can filter Windows for Payments or Deposits to give a better view of these fields.
The Filter Icon field will give you several options for filtering data. This includes ‘cleared status,’ transaction type, date, and payee. With the find field you can look for ‘Memo,’ reference number, Amount, and greater and less than.
Now, Edit info from the statement by pressing the Clicking Edit Info tab.
If you are still figuring out why there is a difference between ‘Statement ending balance’ and the ‘Cleared balance’ is not ZERO, then you can save the work for later and check the above mentioned.
Step 6 – Keep Clearing Transactions until the difference is ‘ZERO’
Once you are at this page, then Run the ‘Reconciliation Report’ that we viewed previously by clicking ‘view report.’ Alternatively, click on ‘Done’ if you need to Run the report at present.
Finally, we have reconciled the Bank statements in QuickBooks, and it is advisable to reconcile every month. You can perform this action as soon as you receive the Bank statement
In case you are looking to Undo Bank Reconciliation in QuickBooks Online or know how to change the beginning balance in QuickBooks Online Bank reconciliation then you can follow the below steps.
Also Read:How to delete and unmatch downloaded transactions in QuickBooks online?
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How to Undo a reconciliation?
In the QuickBooks Online Accountant when you are signing in as an accountant user, choose Client from the drop-down on the Toolbelt to open Client’s company file.
- Choose ‘Gear Icon’ on the toolbar
- In the ‘Tools,’ choose ‘Reconcile.’
- On the ‘Reconcile an account’ page, choose ‘History by the account.
- On the ‘History by account,’ choose Account and the reporting period to search the ‘reconciliation to undo.’
- Now from the ‘action’ column drop-down, choose ‘Undo.’
- When asked, choose ‘YES.’
- In the final confirmation window, choose Undo
- Choose OK.
If you want to Edit Incorrect Opening Balance, then follow the below steps-
In case the opening balance for your accounts is incorrect, you can edit through the account register. Learn how to change the beginning balance in QuickBooks Online Bank reconciliation
- Firstly, Choose Gear Icon and go to Chart of Accounts
- Now locate the account, and go to ‘Action Column’ and choose ‘View register.’
- Search the Opening balance entry
Note: If the date column is sorted from newest to oldest, the opening balance is most likely to be at the bottom or end of the List.
- Choose the opening balance entry once you have found it
- Now Edit the amount.
Note: In case you cannot edit the amount directly on the screen, for some cases you can then edit by choosing the ‘Edit’ button.
- Press ‘Save.’
Note: Any changes done will not be saved if you navigate from the register without saving.
Now you are perfectly aware of how to reconcile bank statements in QuickBooks Online step by step. If the process is performed in proper order and without discrepancies for “QuickBooks online bank reconciliation“, you can reconcile the statements without error. Though because of the complexities of the tasks, there might be some issues that can lead to unwanted delays and disruptions. In such a situation speak to a Certified ProAdvisor at QuickBooks ProAdvisor Support Number.