How to reconcile in QuickBooks?

QuickBooks Online bank reconciliation is a process in which transactions that you have entered into QuickBooks Online are matched against your bank records and credit card accounts. You should know how to reconcile in QuickBooks on a regular basis. You can find account reconciliation to be trouble-free if your online bank accounts are properly connected to QuickBooks Online and regular upkeep is done throughout the month.

Why QuickBooks Online Bank Reconciliation is necessary?

There are many reasons that make QuickBooks Online bank reconciliation a vital practice.

First of all, financial reports will only be valuable if balances in QuickBooks Online are in perfect match with your bank and credit card statements.
The second reason that makes account reconciliation important is that it allows you to accurately process your tax returns at the end of the financial year.
Another reason is that by doing QuickBooks bank reconciliation regularly, you are aware of how much money exactly you have in the bank and you are sure that you are always using accurate data. This accurate knowledge helps you in making smart, informed decisions regarding your business.

How to reconcile in QuickBooks?

Follow these steps to understand how to reconcile bank in QuickBooks Online–

• Firstly, Go to the navigation bar.
• Secondly, select Accounting.
• Now, Choose Reconcile.

• A window will appear with the question – Which Account do you want to reconcile?

• Start by choosing a Checking account from the drop-down menu, and afterward, reconcile each of your connected bank and credit card accounts one at a time.

• Enter the values for Ending Balance and Ending Date from your bank statement in the box on the screen.

• Look at your QB account line by line.
• Match individual items amount to the corresponding entries in your bank statement.

• Match aggregate totals to the corresponding entries in your bank statement.
• Carry-on this process.
• $0 should be the difference between the bank statement and the QB account.
• After you have done, click the Finish Now button.

The difference-value may not match $0 because of the following –

• Bank service charges.
• Checks entered in QuickBooks but not cleared by the bank.
• Transactions not recorded in QB but posted to your bank.

To avoid these above-mentioned problems, you should know how to reconcile in Quickbooks online frequently. You have to resolve these problems systematically.
You can also undo reconciliation in QuickBooks Online. For this, you have to sign in as an accountant user and open the company file from QuickBooks Online Accountant (QBOA). Then, you have to open the account, look for the reconciliation, and finally, undo it.

Reconciliation Report

A QuickBooks bank reconciliation report, or simply, a reconciliation report is an automatically generated report by QuickBooks Online after you finish reconciling. This report helps you if in case you face QuickBooks bank reconciliation problems the following month. The reconciliation report provides a summary of the beginning and ending balances. It also gives you a list of cleared and uncleared transactions.
Follow the following steps to view a reconciliation report –

• First of all, go to the menu on the left.

• Choose Reports.
• The report search bar will appear.
• Type reconciliation report.
• Now, choose Reconciliation Reports.

• Choose the Account for which you want the reconciliation report.
• Now, select the reconcile period from the Report Period drop-down arrow.
• Finally, click to View Report.

Reconciliation Discrepancies

It may happen that you find a different QB opening balance this month, even though the QuickBooks Online bank reconciliation process was completed last month correctly. This implies that a discrepancy has occurred in the books. A reconciliation discrepancy can occur if somehow previously reconciled transactions have got deleted, added, or modified. Adjustments such as journal entries can also lead to a discrepancy.