Reconciliation compares the transactions in QuickBooks Online with your bank or credit card statement for a specific period. In this course, you’ll check your starting balance, compare transactions, investigate differences, and finish the reconciliation.
Complete the transaction review and categorization from Course 4 first. Have the official statement for the account and period you want to reconcile. Menu labels may differ in your version of QuickBooks.
Watch the videos
Video 1
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Video 2
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1. Gather the correct statement
- Choose the business bank or credit card account you want to reconcile.
- Obtain its statement for the period you are reviewing.
- Identify the statement beginning balance, ending balance, and ending date.
- If you have several periods to reconcile, work through them in order, starting with the earliest unfinished period.
Use the statement ending balance, not today’s online banking balance. Reconcile each account separately.
2. Review your records before starting
- Confirm that transactions for the statement period have been recorded in QuickBooks.
- Review pending bank feed activity and match or categorize it as appropriate.
- Check for missing entries and duplicates.
- Keep supporting records available for transactions that need investigation.
Matching bank feed transactions and reconciling an account are separate processes. A connected bank feed does not complete reconciliation for you.
3. Open Reconcile and select the account
- Sign in to the correct QuickBooks Online company.
- Open Reconcile from your accounting navigation or Settings, depending on your version.
- Select the account that matches your statement.
- Check the last completed statement period, if shown, to avoid repeating a period already finished.
4. Check the beginning balance
- Compare QuickBooks’ beginning balance with the beginning balance on your statement.
- If they agree, continue.
- If they do not agree, stop and investigate before reconciling the current period.
- For a first reconciliation, review the opening balance and its date with your bookkeeper.
- For an account reconciled previously, review whether earlier reconciled transactions were changed, deleted, or otherwise affected.
Do not create an arbitrary opening balance or change a previously reconciled transaction simply to make the beginning balance agree.
5. Enter the statement details
- Enter the Ending balance exactly as shown on the statement.
- Enter the statement Ending date.
- Check that the selected account, balance, and date are correct.
- Make sure statement fees and interest have been recorded correctly, without adding duplicates.
- Select Start reconciling, or the equivalent button in your version.
6. Compare transactions one at a time
- Compare each transaction on the statement with the entries in the reconciliation window.
- Check the amount, transaction details, and timing to identify the correct entry.
- Select the checkbox beside each QuickBooks transaction that appears on the statement.
- Review both money coming in and money going out.
- Leave transactions that have not cleared by the statement ending date unselected.
Do not select every transaction just to reach zero. An outstanding check or deposit may legitimately remain uncleared. The date entered in QuickBooks may differ from the bank’s processing date, so compare the complete record rather than the date alone.
7. Investigate any difference
- Review the Difference shown in the reconciliation window.
- If it is not zero, first verify the statement ending balance and ending date. Use Edit info to correct an entry only when it does not match the statement.
- Look for transactions on the statement that are missing from QuickBooks.
- Look for duplicate entries, incorrect amounts, and transactions selected by mistake.
- Check whether fees, interest, transfers, or payments were omitted or entered twice.
- Correct the underlying records using the supporting documents, then review the reconciliation again.
If you are unsure how to correct a discrepancy, pause and ask your bookkeeper. Do not change a correct statement balance or use a balancing adjustment simply to finish. Intuit recommends resolving differences and consulting your accountant before using an adjustment.
8. Finish when the records agree
- Confirm that every selected transaction belongs on the statement.
- Check that the remaining unselected transactions are genuinely outstanding or outside the statement period.
- Confirm the Difference is $0.00.
- Select Finish now, then Done.
A zero difference is necessary, but it does not replace reviewing which transactions you selected.
9. Review the reconciliation report
- Return to the Reconcile page.
- Select History by account.
- Choose the account and completed reconciliation.
- Open the reconciliation report and review its beginning and ending balances, cleared transactions, and uncleared transactions.
- Keep the report with the supporting statement for your records.
QuickBooks generates a report when you finish. This report is a snapshot of the reconciliation; later changes to your books do not update that original report.
10. Repeat for the next account or period
- Reconcile each business bank and credit card account using its own statement.
- Continue through any remaining periods in order.
- Avoid changing reconciled transactions without reviewing the effect with your bookkeeper.
You are ready for Course 6: Create Your Financial Reports.
References
Intuit: Reconcile an account in QuickBooks Online
Intuit: Fix beginning balance issues
Intuit: View, print, or export a reconciliation report
Presented independently by J.R. Harris Bookkeeping. QuickBooks is a trademark of Intuit Inc. This is not an official Intuit course and is not endorsed by Intuit. Screens and available options may vary.