Whether you own a small business with just a single employee or a large enterprise with over a thousand employees, QuickBooks can easily help you simplify your bookkeeping and accounting tasks. The QuickBooks is one of the best accounting software is available on three platforms: Windows (Pro, Premier, Enterprise), Mac and Online. You can also reconcile your account in QuickBooks Online to match the transactions on your monthly bank statement with the transactions you entered into QuickBooks Online.
The best practice is to do this as soon as you receive your bank statement. As you can see, bank reconciliation is quite important and significant skill in learning how to use QuickBooks Online.
Only balance sheet accounts can be reconciled. In order to reconcile an account in QuickBooks Online, click the Gear button. Then click the “Reconcile” link under the “Tools” heading in the drop-down menu to open the “Reconcile” page.
There are differences in how the features on these platforms operate, but they all have the ability to help you manage your business with less hassle and more productivity. So, let’s understand how you can achieve this with the help of the information that is provided in this article. With just a few simple steps, you will have your bank statement reconciled in QuickBooks Online.
Like in QuickBooks Desktop, bank reconciliation for your business accounting in QuickBooks Online (QBO) is a separate event. It is its own module or we can say part, exclusive from the chart of accounts, analyze register and bank feed tools.
Just because you have entered or submitted transactions into QBO using forms, the bank feed, or some third-party data fetching app, you still need to reconcile your bank accounts in QuickBooks Online.
Typically, you will be reconciling your checking, savings and credit card accounts. Some can reconcile other current asset accounts and other liability accounts, even equity, but this article will focus on how to reconcile bank statements in QuickBooks Online financial accounting software tool for small businesses.
Generally, you are required to reconcile your bank accounts monthly, ideally around the same time you get your bank statement alert that it is available, so QuickBooks Online matches what your bank or credit card institution says you have spent and earned. The ending balance of the previous month must match the beginning balance of the next month. Your QuickBooks Online register balance at the end of the last month must definitely match the same on your bank statement.
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Your accountant will likely be the one who actually does your bank reconciliation in QuickBooks Online. If the chart of accounts is a backbone of accounting and if the bank feed is a backbone tool of QuickBooks Online, the bank reconciliation is the monthly culmination of life inside of your financial data. No wonder reports are crucial and important, but bank reconciliation is significant to a healthier business existence. If your bank reconciliation is current and the balances all match, then the file is 89% healthy.
Ultimately, this essential accounting task might be the very best barometer of how much time it is going to take your accountant to clean up your QuickBooks Online file.
Here is a step-by-step instruction along with an example of how to reconcile in QuickBooks Online for your small business financial tasks.
There are two ways to access the Reconcile module/page. You can click on “Accounting” option in the side panel on the left and then click on “Reconcile,” or, from the gear menu (A QuickBooks term referring to the gear icon), you can click on “Tools” and then “Reconcile.” Either option will take you to the same place.
Once you are on the Reconcile page, select the account that you want to reconcile from the drop-down menu.
Usually or generally, you would click “Reconcile” or “Resume reconciling” if you have already started the reconciliation. On the top page, there is “Summary”, which is a list of the prior reconciliations and when they were completed. The “History by Account” link shows similar information to the Summary page, but includes changes/auto-adjustments to the prior re-conciliations, as well as the ability to print out a reconciliation report.
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If you think you need to delete something, you should always check with your business accountant first. Deleting something can cause differences between the ending balance from your last reconciliation or it can un-reconcile a transaction that was already reconciled. Obviously, you would not want to do either of these.
To return to the Reconcile window, click the blue “Reconcile” link at the top right corner of the report. We are ready to reconcile a bank statement in QuickBooks Online, so it is time to enter the statement information.
There are the 3 significant fields – the “Beginning balance,” the “Ending balance” and the “Ending date”. For instance, we want to reconcile a bank statement for the month ending September 30, 2019, so that is what we will enter as the end date.
The statement will show you an ending balance as of the end date (that is, September 30), so you need to enter that as well. The “beginning balance” field will be auto-populated with the end balance of the previous month (that is, August 2019).
Next, click on “Start reconciling”.
You will need to check against the bank statement and check off all of the transactions, such as payments, deposits, etc., that show up on your bank statement as cleared. The more transactions you check off, the lower the difference will be between the statement ending balance and the cleared balance until finally, the different fields will be zero.
You will need to use filters that will help you locate transactions. The window defaults to all transactions in the register that have yet to be reconciled by the statement ending date. You can filter the window by Payments or Deposits to streamline the visual. If you jump on the filter icon by clicking it, you can see more options for filtering the data including Cleared status (the “C” in register column), Transaction type, Payee and Date.
The “Find” field can help you search based on memo, reference number, amount and greater than/less than attributes. You can edit any details and information from your statement by clicking the “Edit Info” tab. You can also choose to save the work for later if you are still trying to figure out why the “Difference” between “Statement ending balance” and “Cleared balance” is not zero.
In the last and final step, you can run the Reconciliation report by clicking on the “View Report”. Alternatively, you can click on “Done” if you do not want to run the report right now.
That’s all! You have now successfully reconciled your banking transactions in QuickBooks Online with the help of these step-by-step instructions.
In a nutshell, we can take a quick look at how to reconcile in QuickBooks Online (QBO) through step-by-step instructions that are given below:
