It is very important to reconcile your accounts so it gives a proper matching report of your bank and credit card statements. As that for balancing your checkbook, you must have to check your accounts in QuickBooks to ensure that they are matching with your bank statements and credit card statements. This whole process is known as reconciling.
If you have the statement of your bank right away, you need to compare all of your transactions with those entered into QuickBooks. When all the statements are matching correctly, it means your accounts are balanced and correct. Experts suggest reconciling the savings, checking, and credit card accounts each month to maintain accuracy. We have discussed here how to get started with this process.
Step 1: Check out your opening balance
If this is the first time you are reconciling an account then firstly review your opening balance. Make sure it should match the balance statement with your bank account statement for the time you started entering transactions in QuickBooks Online.
In case you did not remember to enter an opening balance in QuickBooks the previous time, not to worry. You are allowed to enter your opening balance later on.
Step 2: Start to reconcile
If you got your monthly bank or credit card statement, now you are able to start the reconciliation process. In case you are processing the reconciliation process for various months, remember to reconcile one statement at a time, and start with the boldest statement. Here is how to proceed with the reconciliation process in QuickBooks Online:
- When the accounts are connected with online banking, ensure to match and categorize each and every downloaded transaction you have.
- From QuickBooks Online, go to the Settings option and then click on Reconcile. In case this is your first time reconciling click on the option to Get started to proceed with the process further.
- Go to the Account dropdown section, hit on the account you have to reconcile. Ensure it should be the same one from your statement.
- Check out for your Beginning balance. Ensure your beginning balance in QuickBooks matching with the one from your statement.
- Fill out the Ending balance and Ending date in your statement. Few banks write the ending balance as a “new balance”, so keep in mind that both are the same.
- Once you see it, check out the ending date of the Last statement. This will be considered as the end date for your last reconciliation. The present bank statement must start the day after.
- After everything is done and you are all set to start, click on Start reconciling.
Step 3: Compare your transactions with QuickBooks
You just have to compare your statements with QuickBooks records. Check them out one-by-one and match it properly. Make sure there are the correct dates and transactions in QuickBooks so it becomes easy for you to matches everything correctly. Check out the below categories for the type of account you are reconciling:
How to reconcile accounts connected to online banking
In such a situation you receive each and every transaction statement directly from the bank, so reconciling becomes a very simple process. In a few cases, your accounts have already balanced.
- Begin the process with the very first transaction from the statement.
- Search for the same transaction from your Reconciliation window in QuickBooks.
- Make a comparison between these two transactions. When they match, mark a checkmark to that transaction of the amount in QuickBooks. These marks imply that it has been reconciled.
- Whenever any transaction is not appearing on the statement however you see that transaction in QuickBooks. Then make sure you do not put a checkmark next to it.
- Just like that, you will have to compare all the transactions of your statement with the transactions in QuickBooks.
- Once the comparison is done with all of your transactions, make sure that the difference between your statement and QuickBooks must be $0.00. When you fin dit it $0.00, hit on the option to Finish now.
How to reconcile accounts that are not connected to online banking
Are your account is not connected with online banking? Not to worry, the below steps is for you:
- Begin the process with the very first transaction from the statement.
- Search for the same transaction from your Reconciliation window in QuickBooks.
- Make a comparison between these two transactions. When they match, mark a checkmark to that transaction of the amount in QuickBooks. These marks imply that it has been reconciled.
- Whenever any transaction is not appearing on the statement however you see that transaction in QuickBooks. Then make sure you do not put a checkmark next to it.
- Just like that, you will have to compare all the transactions of your statement with the transactions in QuickBooks.
- Once the comparison is done with all of your transactions, make sure that the difference between your statement and QuickBooks must be $0.00. When you fin dit it $0.00, hit on the option to Finish now.
Step 4: Check out past reconciliations
Now you have one all the reconciling process so be ready to run your reconciliation report to check out your work:
- Firstly, open the Accounting menu and click on the Reconcile.
- Hit on the option of History by account.
- Click on the specific account and date range from the dropdown menus. Or you can print or export your reconciliation reports in case you have to share them with others.
Make some edition in completed reconciliations
When you have complete your reconciliations, you are allowed to make editions to these reconciliations. However, be careful while doing this, because alteration with these can leads to unbalance accounts and your reconciliations. It can even be effective in the beginning balance for your next reconciliation.
Conclusion
Reconciliation of an account is a method of comparing transactions entered in QuickBooks Online with the transactions of your bank or credit card. This process must be followed on a regular interval or every month whenever you get your statements of transactions.
This is the quickest and simple procedure when you connect your account of online banking with QuickBooks Online and execute continuous upkeep throughout the month. So we hope you find this blog helpful and for more help with reconciling an account in Quickbooks online, contact us at +1-877-898-0542.