Reconciliation is the process of matching two related accounts to ensure everything is correct and matches, and it is considered one of the most critical activities you cannot skip. This is because it helps prevent financial statement errors and identifies financial fraud. Other potential benefits include better monitoring of cash flow and ensuring accurate financial reporting. With QuickBooks, reconciling accounts is relatively simple, and in this guide, you will find step-wise instructions on How to reconcile in QuickBooks Desktop.
If you want to reconcile in QuickBooks, ensuring no errors in the process, contact the team of accounting experts at 1-855-542-9309.
Table of Contents
Steps to Perform QuickBooks Desktop Bank Reconciliation (For Windows)
Below is the 5-step process to reconcile your accounts in QuickBooks Desktop for Windows.
Step 1 – Check the Opening Balance
Before starting the process, ensure your QB company file is backed up. Then, review the opening balance entry in the following manner –
- Go to the Lists menu, select Chart of Accounts, then search for and open the Opening Balance Equity account.
- Now, check the account balance and ensure it displays as $0.00.
If the balance is not $0.00, write down the remaining balance and run a balance sheet report for last year. Once done, move to the next step to prepare for reconciliation.
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Step 2 – Prepare for the Reconciliation
Now, you need to prepare for QuickBooks bank reconciliation. Ensure you enter all the transactions for the bank statement period you plan to reconcile. If some transactions haven’t cleared your bank yet and aren’t reflected on your statement, wait to enter them.
Once all the transactions are reflected, follow step 3 below.
Step 3 – Start the Reconciliation Process
If you are reconciling multiple months of transactions, start with the oldest bank statement. Ensure that you reconcile each month separately, one statement at a time.
Note: If you aren’t signed into QuickBooks while reconciling a Merchant or Payments account, you’ll see a sign-in window. Signing in ensures your account is successfully linked to a valid company ID.
Now, implement the following steps to perform the bank reconciliation in QuickBooks Desktop –
- Go to the Banking menu, select Reconcile, then go to the Account field.
- Select the bank or credit card account you want to reconcile, and the Statement Date will be automatically filled in. Usually, the date is 30 or 31 days after the statement date of the previous reconciliation, but you can change it to match your bank statement.
- Now, QuickBooks will automatically enter the Beginning Balance. QBDT uses the ending balance from your last reconciliation to get this balance.
- Further, enter the Ending Balance based on your bank statement, then input the Service Charge and Interest Earned based on your bank statement.
- Do not enter charges you’ve already entered in QB. Then, review the fields and select Continue or OK if the information is correct.
If your beginning balance doesn’t match your statement, the following tools can help you –
- If the numbers don’t match, select Locate Discrepancies to see the reports you can use to find discrepancies and reconciliation issues.
- You must fix your opening and beginning balance if you still have issues.
- Lastly, select Undo Last Reconciliation if you need to start over from scratch.
Note: When you undo a previous reconciliation, your beginning balance reverts to the beginning balance of your last reconciliation, and all cleared transactions become uncleared.
Step 4 – Compare QuickBooks and your Bank Statements
The next step to reconcile QuickBooks Desktop is to compare the list of transactions on your bank statement with QBDT. Ensure you have the correct dates and transactions while comparing them. When the comparison is complete, you’ll be sure everything made it into QuickBooks.
Things to Remember Before Reconciling
Here are a few things you can do to make your reconciliation process smoother –
- To see transactions for the statement period you’re working on, click Hide transactions after the statement’s end date.
- To reconcile a credit card account in QuickBooks Desktop, use the following sections: Charges and Cash Advances (purchases) and Payments and Credits (payments to the credit card company). Focus on one section at a time to make the process easier.
- To reconcile an account for online banking, select Matched and enter the statement Ending Date from your bank statement. This will automatically choose transactions that QuickBooks has downloaded and matched.
Note: A matched transaction has a lightning bolt icon displayed next to it. After you reconcile the transaction, a checkmark replaces the lightning bolt.
- If you want to sort the list, choose the Header or Title of a column.
- If the transactions in QuickBooks exceed the transactions on your bank statement, you must re-sort the list.
Match Your Transactions
Once the points mentioned in the above section are considered, match your transactions by using the following steps –
- When you’re ready to reconcile bank statements in QuickBooks, start with the first transaction on your bank statement and find the same one in the QB Reconciliation window.
- Compare the two transactions, and if they match, select and put a checkmark in the Checkmark column to reconcile them.
- Keep comparing each transaction on your statement with QuickBooks. The Cleared Balance amount will decrease as you clear/add transactions to the reconciliation. The amount will increase if you clear/add deposits and other credit amounts.
- If a transaction doesn’t appear on your statement, don’t mark it as reconciled, and check if things are matching in the following manner –
- To see the total number and amount of transactions you’ve added to the reconciliation, find the “Items you’ve marked cleared” section. Banks also provide the same summary of transactions on bank statements, and you can compare the total number of transactions to see if anything is missing.
- To edit or get more info about a specific transaction, select the transaction, then click Go To or double-click on it.
- If you need to step back and change the information you entered in Step 3: Start the Reconciliation Process above, select Modify. The service charges, interest, and ending balance are displayed in the section beside it.
- Lastly, ensure the difference between your bank statement and QuickBooks is $0.00, and click Reconcile Now.
What Should You Do if There is a Mismatched Balance at the End?
If the difference after reconciliation isn’t $0.00, you have a few options to fix it. QuickBooks opens the Reconcile Adjustment window for bank accounts, and you can use the following options if the balance doesn’t match –
- Return to Reconcile: Go back to the reconciliation to review all the transactions again.
- Leave Reconcile: Save the reconciliation so you can review/edit any existing transactions causing the mismatch. Once you find the issue, come back and finish the reconciliation later.
- Enter Adjustment: If you want to complete reconciling in QuickBooks Desktop, you can force QuickBooks to create an adjustment for the mismatch. Do this only if you are sure that all the correct transactions are in QuickBooks and that what you entered is accurate. If this option is selected, QuickBooks will automatically enter the adjustment as a journal entry. This journal entry will go into a special expense account called Reconciliation Discrepancies.
Once done, review the adjustment and cleared transactions in the step below.
Review the Reconciliation Adjustment
Review a Previous Reconciliation report for the reconciliation you adjusted to see all of your adjustments on the list. This report will display cleared transactions and any changes made after the transaction that may not show in your discrepancies. To review the reconciliation adjustment, follow the steps below –
- Go to the Edit menu, select Find, then open the Find window.
- Select the Advanced tab, click Memo, then go to the Memo field.
- Lastly, type Balance Adjustment and select Find.
Review Cleared Transactions
You can review all of your cleared transactions by implementing the following steps –
- Go to the Reports menu, select Reports Center, then find the Previous Reconciliation report.
- Now, select the account you reconciled and choose Detail, Summary, or Both.
- Choose the Transactions cleared, plus any changes made to those transactions since the reconciliation, and click Display.
For other account types, QuickBooks will open the Make Payment window. This lets you write a check or enter a bill to pay for the outstanding balance. However, if you don’t want to record a payment, click Cancel.
If you still encounter issues or discrepancies when you reconcile a bank account in QuickBooks Desktop, you can recreate the opening balance or edit the cleared transactions. You can also ignore the discrepancies and let QB enter an offset adjustment.
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Step 5 – Review the Reconciliation
After you have reconciled the bank account in QB, you can either view the reconciliation report or print it. Select Display to see the reconciliation report and select Print to take a print of the report.
If you wish to review the report later on, you can use these steps –
- Go to the Reports menu, select Reports Center, then search and open a Previous Reconciliation report.
- Select the account you reconciled, then click either Detail, Summary, or Both.
After following this detailed process, you will be able to reconcile the bank account successfully.
On the other hand, if you want to perform the bank reconciliation in QuickBooks for Mac, move to the next section.
How to Reconcile in QuickBooks Desktop for Mac?
You need to reconcile your accounts in QB so they match your real-life bank and credit card statements. Compare the list of transactions on your monthly bank statements with what you entered in QuickBooks to know if the accounts are correct and balanced.
Before you reconcile an account in QuickBooks for Mac, ensure the following –
- Create a backup of your QBDT company file to prevent data loss.
- Check and ensure the beginning balance of your account is correct.
- All transactions for the bank statement period are present in QBDT.
- Have a copy of the bank or credit card statement and keep a pencil to mark the selected items.
Once done, proceed to reconcile the account.
Step 1 – Perform the Reconciliation Process
If you are reconciling multiple accounts, start with the oldest one and reconcile each statement at a time. Follow ‘Step 3: Start the Reconciliation Process’ of the ‘Steps to Perform QuickBooks Desktop Bank Reconciliation (For Windows)’ section above.
Note: If the opening balance is incorrect, you can do a special reconciliation as an alternative. If the opening balance is zero and the file was not sent back and forth between Windows and Mac, you need to resolve the data damage (run the QuickBooks Verify and Rebuild Data tool). On the other hand, if the issue occurs with multiple files, clean install QuickBooks.
Special Reconciliation
When fixing issues with bank or credit card accounts, you may need to delete and re-enter transactions and reconcile them. You can simply do a special reconciliation to save time and avoid undoing previous reconciliations until you find the transactions causing the discrepancy. To perform the special reconciliation, implement the following steps –
- Go to Banking and select Reconcile. In the Statement Date field, enter the date of the incorrectly reconciled month.
- Further, input the balance plus/minus the difference in the Ending Balance column, and if the difference is positive, add it to the beginning balance.
- On the other hand, if the difference is negative, subtract it from the beginning balance.
- Select OK, then move to the Reconcile screen, put a checkmark on the un-reconciled transactions, and ensure the difference is zero.
- Select Reconcile, then review the Previous Reconciliation Detail Reports again, and note that both reports will show the same data.
Once done, move to the next step to match the transactions.
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Step 2 – Match the Transactions
There are a few options to match the transactions, which are as follows –
- Account – Indicates the account is being reconciled. Select this option to view/change the info from the Begin Reconciliation window.
- Search field – To find uncleared transactions by Name, Amount, Account, Date, Check number, or Payee.
- Deposits and Other Credits, Checks, and Payments – These are uncleared transactions entered in QBDT. Check the transactions against what you have on your bank or credit card statement, and as you select transactions, the Cleared Balance changes.
Note: The sections that apply to credit card accounts are Charges and Cash Advances (purchases) and Payments and Credits (payments to the credit card company).
- Items you have marked cleared – This indicates the total number and the total amount of Deposits and Checks you’ve chosen. If your bank provides the same summary on the bank statement, use it to find the discrepancies.
- Mark All or Unmark All – These buttons can be used to select/deselect the transactions. If you reconcile regularly and all transactions for the statement period are entered correctly, selecting all transactions at once can save time.
- “Hide transactions after the statement’s end date” – This box can be selected to see only the transactions dated on or before the statement date.
- Leave – You can use this option to exit the reconcile window. Don’t worry; your selected items will still be marked when you reopen this window.
- Reconcile Now - This option can be selected when all the transactions are matched.
Check the Reconciliation Difference
Based on the reconciliation difference, perform the following steps –
The Difference is Zero
If the difference is zero, QuickBooks Desktop saves the reconciliation and shows the Select Reconciliation Report window. You can print, display, or close it, and if you choose to print it, follow these steps:
- Firstly, open the Select Reconciliation Report window and select a type of report.
- Select the level of detail you want in the report from the following options: Summary, Detailed, Both, or None, then click Done.
- Lastly, return to the report by moving to the Reports menu, selecting Banking, and clicking Previous Reconciliation.
The Difference is Not Zero
If the difference isn’t zero, QuickBooks displays the Reconcile Adjustment window, which has the following options –
- Return to Reconcile – To go back to the previous window.
- Enter Adjustment – To complete the reconciliation process. QuickBooks will automatically enter a Journal Entry under the Reconciliation Discrepancies account. You can view/edit this account from the Chart of Accounts section.
However, if you don’t want to enter an adjustment, use the following reports to find the cause of the difference –
- Reconciliation Discrepancy Report
- Previous Reconciliation Report
- Bank Account Quick Report
- Audit Trail Report
Once you find and correct the discrepancy, re-reconcile your account by using either of the two options below –
- Undo/clear reconciliations from the one with the discrepancy forward and reconcile them again.
- Run a Special Reconciliation (see the “Special Reconciliation” section of Step 1 of this section) to reconcile only the affected transactions.
After the process is complete, you will be able to reconcile the accounts in your QuickBooks for Mac successfully.
Conclusion
We hope this comprehensive how-to guide helps you learn How to reconcile in QuickBooks Desktop. However, if the instructions doesn’t help you or you are facing reconciliation problems, contact our expert team at 1-855-542-9309 for immediate assistance.
FAQs
What is a Reconciliation Discrepancy report, and how can you run it?
A Reconciliation Discrepancy report shows transactions that have changed since the last bank reconciliation. To run this report, undertake the following steps –
1. Go to the Reports menu, select Banking, and click the Reconciliation Discrepancy option.
2. Select the account you’re reconciling, click OK, and review the report.
3. Look for any discrepancies and contact the person who made the changes. Once you know the reason for the change(s), edit the transaction as needed.
How to view or print a reconciliation report in QuickBooks Desktop?
To view or print a reconciliation report in QuickBooks, perform the following steps –
1. Go to Reports, then type Reconciliation Report in the Find report by name search bar.
2. Click Reconciliation Reports, then select the account for the reconciliation report you want to see.
3. Now, choose the reconcile period from the Report period drop-down arrow and click View Report.
4. To print this report, select the Print icon in the upper-right corner of the report.
How to correct a reconciled deposit in QuickBooks?
You can edit a reconciled deposit in QuickBooks by implementing the following steps –
1. Go to the Accounting menu on the left pane and select Chart of Accounts.
2. Look for the correct account for the transaction in question, then go to the Action column and select View Register.
3. Locate the reconciled deposit, click Edit, then go to the Bank Deposit page.
4. Now, edit the Received from field to select the correct customer, then click Save and close.
How do you see previous reconciliations in QuickBooks Desktop?
You can run the previous reconciliation report to see the transactions in the following manner –
1. Go to the Reports menu, select Banking, and click Previous Reconciliation.
2. Select the account you reconciled from the Account drop-down, then go to the Statement Ending Date section.
3. Select the reconciliation period you want to review, then click Detailed or Both for the report type.
4. Select which transactions you want to see on the report among the following options –
Transactions cleared at the time of reconciliation show only the transactions in the account at the time of the reconciliation.
Transactions cleared plus any changes made to those transactions show transactions in the account at the time of reconciliation and where they currently are in your accounts.
5. Finally, when you’re ready to run the report, click Display.
Erica Watson is writing about accounting and bookkeeping for over 7+ years, making even the difficult technical topics easy to understand. She is skilled at creating content about popular accounting and tax softwares such as QuickBooks, Sage, Xero, Quicken, etc. Erica’s knowledge of such softwares allows her to create articles and guides that are both informative and easy to follow. Her writing builds trust with readers, thanks to her ability to explain things clearly while showing a real understanding of the industry.