QuickBooks is an incredible program that offers many incredible features to users. The account reconciliation facility is one such amazing feature, which lets users match the bank/credit card transaction to that recorded in QuickBooks. Thus, you can save time in manual entries and always remain assured that there are no discrepancies in the transactions. In this post, we will cover all the important aspects you need to know to reconcile in QuickBooks Online. Let’s begin!
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What is the Significance of Bank Reconciliation in QuickBooks?
Reconciling the bank accounts in QuickBooks online will provide you with a clear picture of your financial statements. Also, it helps in finding the difference between the two accounts. Apart from this, there are numerous other benefits of using bank reconciliation we have listed a few of them below.
- No matter how smooth your accounting is, there is always a scope for human error. Sometimes common mistakes might happen on the user’s hand, such as double payments, missed payments, lost check, etc. With the help of bank reconciliation, users can easily spot errors so that they can fix them instantly.
- In addition to this, the bank reconciliation helps you to verify that you have placed all the transactions with proper dates on both bank statements and QuickBooks. Doing so will help in finding the discrepancy on both accounts while generating the balance sheets.
- With the bank reconciliation, you can rectify the issue then and there only without any further delays.
What Should be Done to Reconcile in QuickBooks Online?
To reconcile the accounts in QuickBooks Online, it is a must to follow the proper procedure. Below, we have explained the complete procedure to do the same, have a look at them.
Stage 1: Evaluate Your Opening Balance
The first thing you must do is to check the opening balance you have included in your accounts. Also, verify that the total balance of your bank account must match that of your account’s opening balance.
Stage 2: Commence with the Reconciliation Process
After getting your bank or credit card statement and QuickBooks balance, you can proceed with the reconciliation process. Suppose you are reconciling for multiple months; then you have to reconcile one statement at a time, initiating with your older statement.
- If you are attached to online banking, check that you match and classify all your downloaded transactions.
- Open the QuickBooks Online application, head toward the Settings menu, and click the Reconcile option.
- After this, tap the Accounts dropdown menu and pick the account you want to reconcile. You must ensure that it is the same account mentioned in your statement.
- Next, you must have a look at your Beginning Balance. Apart from this, examine that the beginning balance in QuickBooks tallies with the one specified in your statement.
- You must specify the Ending Balance and the Ending Date on your statement.
Note:-Some financial institutions name the ending balance as a “new balance.”
- You must go through the Last statement ending date. This is the end date of your previous reconciliation. Your present bank statement would initiate the day afterward.
- Once you are all set, tap Start Reconciling to initiate the process.
Stage 3: Tally Your Bank Statements with QuickBooks
After completing the above procedures, all you have to do is to reconcile the bank statement with your QuickBooks accounts. Moreover, it is also crucial to list correct dates and transactions within QuickBooks.
Detailed Procedure to Reconcile Accounts Associated With Online Banking
Here, we have specified some instructions to reconcile the accounts connected with Online Banking.
- Commence the process from the very first transaction specified on your statement.
- You must check for the same transaction from the Reconciliation window in QuickBooks.
- Afterwards, you have to correlate both of these transactions. If you see that both transactions match, place a tick mark beside the amount column in QuickBooks. This will show that your account is reconciled successfully.
- On the other hand, if you find that the transaction isn’t reflecting on your statement but is shown in QuickBooks, place a tick mark sign.
- Next, you must tally every transaction in your statement corresponding to that in QuickBooks.
- Once you come to the end of the process, the difference found between your statement, and QuickBooks must be GBP £0.00. If you find it, then opt for the Finish Now option to end the process.
Stage Four: Double-Check The Past Reconciliations
At this stage, you must run a reconciliation report to review your work. For that, go through the stepwise instructions below closely.
- To begin with, move to the Settings menu and opt for the Reconcile option.
- Afterwards, hover your cursor over the History By Account option and move further.
- Now, tap on the drop-down menu to pick the appropriate account and date range.
Stage Five:- Acquire a Printout of the Reconciled Transactions
The QuickBooks Online application instantly creates a reconciliation report for the particular session as soon as you conclude the reconciling process. Later on, you can get the report printed or export it to another person if required.
This is all about the process to reconcile in QuickBooks Online, and we hope that you may find this post worth reading. However, if you have any further queries you can have a one-to-one consultation with our experts through the live chat facility. Otherwise, you can also send them a message mentioning your query and obtain the best possible results.
Frequently Asked Questions
1: What does bank reconciliation mean in QuickBooks Online?
Ans. Bank reconciliation is a feature in the program that lets users connect their bank or financial institution to QuickBooks Online and check to compare their transactions. When the transactions in the bank match exactly to those in QuickBooks, it means that the reconciliation is successful.
2: How to check if the accounts are reconciled successfully?
Ans. If you want to check if the account is reconciled properly or not, just check the ending balance of your bank and those in QuickBooks Online. If the difference between the two ending balances is zero, it means that the reconciliation is correct. If not, you need to check your transactions for possible discrepancies.
3: What are the benefits of bank reconciliation?
Ans. Bank reconciliation in QuickBooks Online has many advantages. You can check your accounting records and match your bank statements. Thus, you can determine discrepancies in the transactions, prevent overdrafts and keep your financial record accurate.
4: Is it possible to reconcile multiple accounts in QuickBooks?
Ans. The answer is Yes! In QuickBooks Online, you can reconcile multiple accounts at once. You can navigate to the Banking menu and select each account you want to reconcile. Once done, you need to perform the same steps that are required for a single account.
5: What to do if the reconciliation fails?
Ans. If your bank reconciliation in QuickBooks Online is not balanced, you can contact a trained QuickBooks professional to describe your specific issue. Based on your error description, they will guide you with the relevant solution.