If you’re new to the world of accounting and bookkeeping or trying to take care of your own small business’s financial affairs, you might be wondering how to reconcile in QuickBooks online or desktop.
You probably already know that when you reconcile accounts, you compare one record to another. In this case, you will be comparing your bank records with the records in your accounting system. Fortunately, reconciliation in QuickBooks is quite intuitive and easy, so read on for quick and easy step by step instructions.
How do you reconcile in QuickBooks step by step?
If you are using QuickBooks online and you have your bank accounts connected to the system, then the steps involved in how to reconcile in QuickBooks are very simple to follow. Here’s what you need to do:
1. Login to your QuickBooks account
2. As with most advanced accounting processes, it’s a good idea to do your reconciliation in single user mode, because if other users make changes while you are working, you might not get the results you need
3. Click the gear button
4. Select “Tools” and then “Reconcile” from the drop down menus
5. Select “Accounts” and then choose the account you want to reconcile
6. Enter the end date for the reconciliation
7. Enter your ending balance as per your bank statement
8. Match transactions one at a time, checking them off in QuickBooks and on your bank statement
9. Continue the process until the “Difference” field reaches zero
The process of reconciliation in QuickBooks is quite simple, but you need to make sure you’re using the right account in QuickBooks and the right bank account, with the same end date. If you don’t match those things up before you start, it will be impossible to get your reconciliation to balance.
How to Filter Your QuickBooks Reconciliation
If you’re like most small businesses, you probably have more than one bank account, which means that when you do your reconciliation, you need to reconcile one account at a time.
While you are setting up your reconciliation in QuickBooks, you can use the filters to select the specific information you want to include in each reconciliation process. So you can run different reconciliations for your checking, savings and credit card accounts.
How does reconcile work in QuickBooks?
As you probably know, accounting is based on a lot of checks and balances. Every transaction needs to be balanced by another, which helps to ensure that there are no errors in your accounting or bookkeeping systems.
Bank reconciliation in QuickBooks is the same thing.
Because bank deposits are based on actual transactions, there’s less chance that your team made an error entering information. This means that you can use your bank statement to verify that you have not made any mistakes or left out any transactions in your QuickBooks system.
If the value and information on your bank statement differs from what you have on your bank statement, then there’s a good chance you entered information incorrectly. If you have transactions on your bank statement that are not in QuickBooks, then you probably have not recorded transactions, and if you have transactions in QuickBooks that aren’t on your bank statement, there might be another problem somewhere.
All of this is done to ensure that the information in your accounting system is as accurate as possible.
How do I do a bank reconciliation in QuickBooks?
As mentioned above, reconciliation in QuickBooks is a simple process where you compare the transactions recorded in QuickBooks with the transactions that appear on your bank statement.
If everything in your QuickBooks system is correct, they should be a perfect match and you should have a zero balance when you have completed the process. If they don’t balance and you don’t get a zero value, then there is something missing or incorrect in your accounting system.
Because you can connect QuickBooks online to your bank account, QuickBooks can access the most up to date information on your bank statement. So, where the process of reconciliation might once have meant two different paper copies of transactions and a lot of time matching them up, it’s now quick and easy to get the job done.
Does QuickBooks automatically reconcile?
While the process of reconciliation in QuickBooks is automated if your bank feed is integrated with the software, you still need to do the steps to reconcile accounts when you need to.
QuickBooks will not automatically reconcile your account if you don’t follow the process stated here.
Automate Reports Too
When you have reconciled your accounts in QuickBooks, you can generate a reconciliation report, which is a useful document. However, if you’ve been using QuickBooks for a while, you might have realized that when you do need reports, there’s a lot of manual work involved.
That’s why we created LiveFlow.
It’s a QuickBooks add-on that includes the revolutionary Google Sheets Add-On, which allows you to connect QuickBooks directly to your own custom Google Sheets reports and import chosen data automatically. So while QuickBooks reconciliation doesn’t happen automatically, you can set your reports up, so you always have the most up to date information displayed.
Our QuickBooks and Google Sheets integration makes generating the reports you need an easy, one time task.
If you’re interested in saving time preparing reports and other ways that LiveFlow can help you to automate your accounting processes, we’d love to talk. Contact our team to ask questions or request a demo.