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Camino Financial
By: camino-financial
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How to Reconcile in QuickBooks Online: Easy Step-By-Step Guide

Not everything is easy in life. Vehicles break down in the middle of a freeway, and health insurance costs seem to climb upward steadily. However, there’s one thing that’s simple: learning how to reconcile in QuickBooks Online (QBO) to balance your business checking, savings, and credit card accounts. 

In the early 2000s, Intuit launched QuickBooks Online. And, according to a news release by the manufacturer in 2017, the platform now has over 2.2 million users worldwide. The cloud-based software is easy to use, has advanced invoicing and tracking features, mobile apps, and built-in sales, inventory, and custom-user functions.

If you haven’t found out yet, bookkeeping helps your small business succeed. You stay on top of your finances by monitoring expenses and account balances to optimize your business’s growth potential.

In this post, we’ll take you each step of the way to teach you how to reconcile in QuickBooks Online. Plus, you’ll discover why it’s necessary to reconcile your books with your bank statement.

How to reconcile in QuickBooks Online

Follow these steps to learn how to reconcile in QuickBooks Online. 

Reconcile in Quickbooks

Source: QuickBooks Online

1. Back up your files

Before you begin reconciling, back up your company file. If necessary, you can use the file to restore your accounting data. Many users set up automatic backups instead of manually saving information occasionally.

2. Login

Log into your QuickBooks Online account.

Reconcile in quickbooks: login

3. Click on Reconcile

Once you’ve logged in, navigate to the banking menu and click on “Reconcile.”

4. Click on Accounts

Under the drop-down menu, click on the word “Accounts.” From there, select the account you want to reconcile.

Reconcile in QuickBooks
Source: QuickBooks Online

5. Make sure it’s the correct statement

The bank statement your reconciling may not be your current one if you haven’t reconciled for a few months. If you reconciled within the last 30 days, the statement date and beginning balance should fill in automatically. Otherwise, enter the  “Ending Balance” that appears on the bank statement you’re reconciling.

6. Add missing information

Before you begin reconciling, enter information on the bank statement that hasn’t been entered into your records. Examples include interest and service charges. 

7. Make sure the balance matches

If the beginning balance doesn’t match your logs, use the “locate discrepancies” feature that provides a report to track mistakes. If you still can’t find the problem, you can undo your last reconciliation and work backward until the beginning balance matches. 

8. Sort transactions

To make reconciling easier, you can sort transactions by date or hide transactions dated after the statement date. You can also set up transactions by specific columns such as date, payee, check number, and amount. 

Reconcile in QuickBooks

Source: QuickBooks Online

9. Review specific transactions

If you need more information about a specific transaction, select it, and click on “Go To.” You can make minor edits before you mark the transaction as cleared or reconciled. 

10. Check each transaction

Using your mouse, check off each transaction, one at a time, by matching the bank transactions (deposits, withdrawals, and other entries) to your account entries. If you need to complete other office tasks, simply “Leave Reconcile” and “Return to Reconcile” to begin where you left off.

11. Get to zero

Continue reconciling until the difference field shows zero. That means that your bank statement and financial records match.

Reconcile in QuickBooks

Source: QuickBooks Online

12. Print a copy

Review the reconciliation report and print a hard copy of the reconciled statement when you’re done, which is available in both detailed and summary formats. You can also print a report later by selecting the Reports Menu.

Once you get in the habit of making timely bank reconciliations, you’ll feel more confident about your finances and have more time to concentrate on other business activities. You may even look forward to completing a bank reconciliation.

What is a bank reconciliation?

Every month your business receives either a paper or email copy of your bank statement. When it arrives in your mailbox or inbox, it’s your cue to reconcile your financial records with your bank’s monthly history of transactions.

By doing so, you identify any outstanding checks or electronic payments that haven’t posted or deposits you may have failed to enter into your accounting ledger. Likewise, you can spot any accounting errors or suspicious-looking entries that may be fraud attempts on your account’s funds. When you reconcile a bank statement, you match each transaction with your records to verify that the amounts coincide.

When you learn how to reconcile in QuickBooks Online, you don’t need to wait until your bank statement arrives. You can balance your accounts daily, weekly, or any time you want.

Why do you need to reconcile?

If you don’t reconcile your accounts and depend solely on your bank statement balance to run your business, it’s like playing Whac-A-Mole. 

When playing the game, toy moles pop up, and players whack them with a mallet, so they retreat back into their holes. In the same way, checks written weeks ago can keep popping up on your online bank statement you forgot about and failed to list as outstanding. Completing a bank reconciliation prevents that scenario from happening.

Without reconciling your online bank account with your business’s books, you lose track of deposits, withdrawals, checks written, and any checks that haven’t been cashed. Essentially being delinquent in completing this critical bookkeeping activity sets you up for accounting failures. 

A bank reconciliation is the best opportunity to catch checks or transfers that may have posted and weren’t authorized.

Additionally, knowing how much cash is available at all times means you keep a close eye on cash flow. You also avoid bouncing checks due to insufficient funds that generate bank fees and penalties. 

Banks make mistakes too. By completing bank reconciliations regularly, you can catch their errors too. 

Life just got easier

By learning how to reconcile in QuickBooks Online, you can simplify and streamline your accounting functions. Ultimately, this makes your life much easier. 

The importance of reconciling your bank statement cannot be understated. If you don’t, your business can face unfavorable consequences.

To learn more about bookkeeping, we encourage you to keep reading:

Futuristic graphical user interface concept. Concept: Virtual Bookkeeping

Virtual Bookkeeping: Everything You Need to Know


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