Reconcile an account in QuickBooks Desktop

When you create a new account in QuickBooks, you pick a day to start tracking transactions. You enter the balance of your real-life bank account for whatever day you choose. We recommend setting the opening balance at the beginning of a bank statement. There are a few reasons your QuickBooks data may not match your account statements, including bank service charges, checks that haven’t cleared, and transactions that haven’t been entered in QuickBooks yet.

As a result, the balance shown in the bank passbook would be more than the balance shown in your company’s cash book. At times, your customers may directly deposit funds into your business’ bank account, but your business will not notified about this the bank statement is received. When your business issues a check to suppliers or creditors, these amounts are immediately recorded on the credit side of your cash book.

The tricky part is making sure you have the right dates and transactions in QuickBooks so you know everything matches. When you’re done reviewing your statement, you’ll know everything made it into QuickBooks. Before you start with reconciliation, make sure to back up your company file.

1. This report is useful if you have trouble reconciling the following month.
2. We offer reconciliation reports, discrepancy identification, and live accountants to work with for ease and confidence when closing your books.
3. Once you get your bank statements, compare the list of transactions with what you entered into QuickBooks.
4. There are bank-only transactions that your company’s accounting records most likely don’t account for.
5. We recommend setting the opening balance at the beginning of a bank statement.

Step 4: Make Sure the Balance As Per the Bank Matches the Balance As Per the Cash Book

Once you get your bank statements, compare the list of joint product definition and meaning transactions with what you entered into QuickBooks. If everything matches, you know your accounts are balanced and accurate. The information on your bank statement is the bank’s record of all transactions impacting the company’s bank account during the past month. Compare the ending balance of your accounting records to your bank statement to see if both cash balances match.

Note that this process is exclusively for reconciliations performed by hand. If you use accounting software, then your reconciliation is done largely for you. However, as a business owner, it’s important to understand the reconciliation process. To reconcile, simply compare the list of transactions on your bank statement with what’s in QuickBooks. This means that the company’s bank balance is greater than the balance reflected in the cash book.

Reconcile an account in QuickBooks Online

This report is useful if you have trouble reconciling the following month. As a result, you’ll need to deduct the amount of these checks from the balance. Once you complete the bank reconciliation statement at the end of the month, you need to print the bank reconciliation report and keep it in your monthly journal entries as a separate document. This document will make auditors aware of the reconciled information at a later date. The purpose of preparing a bank reconciliation statement is to reconcile the difference between the balance as per the cash book and the balance as per the passbook.

Review: What are bank reconciliations?

However, there might be a situation where the receiving entity may not present the checks issued by your business to the bank for immediate payment. Whereas, credit balance as the cash book indicates an overdraft or the excess amount withdrawn from your bank account over the amount deposited. This is also known as an unfavorable balance as per the cash book or an unfavorable balance as per the passbook.

Preparing a Bank Reconciliation Statement

This way, the number of items that can cause the difference between the passbook and the cash book balance is reduced. And as a result, it gets easier to ascertain the correct balance in the balance sheet. This is a simple data entry error that occurs when two digits are accidentally reversed (transposed) when posting a transaction.