How to Reconcile in QuickBooks Desktop | 9 Simple Steps

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You must know how to reconcile in QuickBooks Desktop to ensure your financial records accurately reflect your bank account balance. This is one crucial step for balancing the books and identifying unusual transactions due to accounting errors or fraud.

Reconciling is when you balance the checkbooks and evaluate if your bank and credit card statements align with your QuickBooks account. In the same way, QuickBooks Desktop needs reconciliation to ensure that transactions in the software match those shown in your banks and credit cards.

However, if this is your first time reconciling in QuickBooks Desktop, we are here to help. This guide will walk you through 9 easy-to-follow steps for reconciling QuickBooks accounts.

Before we begin, though, let us define opening balance, which is widely used in reconciliation in accounting software. We will also explore the reasons that might lead to mismatching or incorrect ending balances.

If you want to reconcile your accounts in QuickBooks under the supervision of an expert, reach out to the team of certified ProAdviosrs at 1855-546-5024

Opening Balance and Ending Balance- A Quick Explanation

Let’s say you created an account in QuickBooks and started tracking the transaction in your bank account. The bank balance when you start tracking the transactions is the opening balance.

The ending balance is the opposite of the opening balance. The amount that remains in your account at the end of the concerned financial period, which could be a week, a month, a quarter of the year, or a year.

Opening and ending balances can be positive, zero, or negative.

Reasons Ending Balances Might Have Issues

Often, QuickBooks users witness that the ending balance on their QB account and bank or credit card statements don’t match. This means mistakes were made when entering or managing the QB journal entries and accounts.

You may notice incorrect or mismatched ending balance because of one or more of the following reasons:

• You entered an incorrect opening balance at the beginning of the financial period. Simply put, you entered a value for the opening balance that didn’t match the bank balance at the beginning of the financial period.
• The transactions you entered into QuickBooks are causing issues. They might be incorrect, missing, or duplicated.
• You entered some transactions into QuickBooks that are yet to clear your bank.

Here’s How to Reconcile in QuickBooks Desktop

Follow the steps listed below, which will guide you on reconciling effortlessly in QuickBooks Desktop.

Step 1 – Before You Start Reconciling

Before you begin reconciling, be sure to consider the three important points below.

• First, you must create a backup of the company file.
• Secondly, you should review the opening balance, especially if you are reconciling for the first time.

You can manually enter the opening balance, although QuickBooks automatically enters it if you connect it with your bank or credit card account. However, you must manually enter the opening balance if you don’t wish to connect online banking with QuickBooks. This is done when you create an account.

Moreover, you can also edit the opening balance and starting date if required.

• Lastly, before you proceed with reconciliation, ensure that your journal is up-to-date and that you have entered all the transactions for the financial year.

Step 2 – Begin Reconciling

To reconcile, you’ll need your bank statement. Moreover, determine if you wish to reconcile for the current month, many months, or year. If you want to reconcile for multiple months, start with the oldest month. Reconcile each month individually, moving from older to newer. Moving in the suggested order is crucial to avoid errors.

You will be prompted to sign in if you are using a Merchant or Payments account.

• Open QuickBooks. Click on the Banking menu.

• Click on Reconcile. You will see many accounts.
• Choose the account you wish to reconcile.
• QuickBooks automatically enters the statement date. If it doesn’t match your bank statement, you can change it.
• QuickBooks automatically uses the ending balance of the last reconciliation to get a beginning balance.
• Enter the ending balance on your bank statement.
• Enter the service charge and what you earned on interest for your bank account, excluding the charges you entered in QuickBooks.

Step 3 – If Your Beginning Balance Doesn’t Match

If your opening balance matches, you can skip to the next step.

If your beginning balance doesn’t match the bank statement, some tools in QuickBooks can help.

• If the values are different, click on the Locate Discrepancies option. This report helps you spot the discrepancies and determine what is causing the issue.

• If your opening balance doesn’t match, you’ll need to review your opening balance over the last few months.
• Also, check the beginning balance at different financial periods you previously carried reconciliation on. Moreover, check the original opening balance when you made the account and ensure it is correct.
• If you need to start from scratch or undo a reconciliation, all the reconciliations for the financial period after that time will be cleared. The ending balance at the last reconciliation becomes your beginning balance for the following financial period.

Step 4 – Tally QuickBooks with Bank Statement

If the opening balance for the period you wish to reconcile is correct, previous years’ transactions won’t impact the balancing for this financial period.

• Compare your bank statement and transactions that are entered in your QuickBooks account.
• This way, you can spot duplicate, missing, or incorrect entries.
• You can opt to hide transactions after the statement’s end date to help you focus on the transactions for the concerned financial period.

• You can also reconcile a credit card account in this manner. There will be sections named Credits, Payments, Cash advances, and Charges for credit cards. Take care of one section at a time.
• If you are reconciling an account for online banking, click on matched and enter the statement’s end date. QuickBooks will select the transactions it downloaded and matched.
• A lightning bolt beside it distinguishes a matched transaction. Once you reconcile it, the bolt becomes a checkmark.
• Moreover, you can also sort the list by selecting the headers or titles of columns.

Step 5 – Match Transactions

Now, we will match each transaction one by one.

• Open your bank statement. Check the first transaction.
• Find the same transaction in QuickBooks in the reconciliation window and tick the checkbox.
• Do this for other transactions.
• When you clear or add transactions to the reconciliation, you will see that the Cleared Amount will decrease.

• However, the amount will increase when deposits or other credit amounts are cleared or added.
• When you find a transaction that doesn’t show in the bank statement, don’t checkmark it.
• Get info about the transaction by double-clicking or selecting it and clicking Go To.
• If you wish to check the information you entered in the last step, select Modify.

The QuickBooks and bank account will have the same value after reconciliation.

Step 6 – If Transactions Didn’t Match

You can jump to the next step if your transaction matches and get a zero difference between the bank statement and QuickBooks.

• Open QuickBooks’s reconcile adjustment window if your issue concerns a bank account.
• This will allow you to:
  • Return to reconciliation and review things again.
  • Save and leave the reconciliation to review and edit later.
  • You also have the option to make the adjustments to reconcile. However, only do this when you are sure the data you entered on QuickBooks is accurate.
  •  This entry goes into an account specially made for expenses named reconciliation discrepancies.

Step 7- Review Reconciliation Adjustments

You can check the previous reconciliation report, which will show all the adjustments on the list. It also shows the cleared transactions and changes made after the transactions that do not show discrepancies.

• To do so, navigate to the Edit menu and select Find.

• Go to the Find window.
• Now, choose the Advanced tab.
• Click Memo, and in that field, choose Balance Adjustment.
• Now, click on Find.

Step 8- Review Cleared Transactions

Follow these steps to review all of the cleared transactions.

• Navigate to the Reports menu.
• Click on Reports Center.
• Now, search for the previous reconciliation report and open it.

• In that, choose the account you reconciled and choose from Detail, Summary, or both.
• Now, choose the transactions that cleared any changes made to these transactions.
• Lastly, click on Display.

Note: For other accounts, QuickBooks allows you to make payments through bills or checks through the payment window. This covers the outstanding balance. You can click cancel when this window pops up if you don’t want to make a payment.

Step 9 – Review Reconciliations

Once you are done with reconciling, choose display to get the reconciliation report. Click on print to print the report.

You can alternatively review the reconciliation report in this way.

• Click on the Reports menu.
• Now, click on Reports Center.

• Open a previous reconciliation report.
• Choose the account you reconciled and choose from Detail, Summary, or both.

How Do I Edit Previous Reconciliations in QuickBooks Desktop?

First, you must understand that editing reconciled transactions can cause discrepancies and require you to redo the reconciliation for the accounting period after the transaction you edit.

Therefore, talk to your accountant before you follow these steps to edit the transactions in a previously reconciled period.

• Now, click on Accounting.
• Tap on the Chart of Accounts tab.
• Choose the right bank account. Now tap on View register.
• Find the transactions you want to edit and look for R in the column.
• Click on the transaction.
• Now, click the R status many times until it’s blank or unreconciled.
• Tap on Edit.
• Make the required changes and save them.

Now, you can go back to the register and manually reconcile. Cross-check the reconciliation to look for any discrepancies.

How to Get Reconciliation Reports in QuickBooks Desktop?

It is very easy to view the reconciliation report in QuickBooks Desktop.

• Open QuickBooks Desktop and tap on Reports.
• Enter Reconciliation Report in the Find report by name search bar.
• Tap on Reconciliation Reports.
• Click on the Account for the reconciliation report you wish to view.
• Choose the reconcile period from the Report period drop-down arrow.
• Tap on View Report.

Now, tap on the Print icon on the upper right side of the report.

How Often Should You Reconcile?

You should reconcile bank checks, savings accounts, and credit cards every month. Get your bank statement and match the transactions with those on QuickBooks. Do the same for credit cards or similar accounts. This helps keep the books balanced and accurate.

Final Words

So, this was all about how to reconcile in QuickBooks Desktop. If you face an issue or have a query, feel free to get in touch with us. Alternatively, you can delegate the task to our ProAdvisor for a fast resolution. Dial 1855-546-5024 now!

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