Whether you’re a business owner trying to do your own books in QuickBooks, or a bookkeeper who has only just started using the platform for a new client, there’s going to come a time when you’re going to have to do a bank reconciliation. It’s always a little nerve-wracking to do things like this for the first time!
The good news is that QuickBooks is one of the most user-friendly accounting platforms, so it’s not too hard to do this. However, like everything with QuickBooks accounting, there’s a procedure you need to follow.
What Is Reconciliation?
If you’re a bookkeeper or an accountant, you will already know what reconciliation means. But if you’re a small business owner who is trying to manage your own finances, many accounting terms might sound like a different language!
The good news this is not as complicated as it sounds.
It’s basically just comparing one record with another. If you compare the totals and you get to zero, this means both accounts are the same, and that means that there are no mistakes. If they’re not the same, then there might be an error on one of the accounts.
So when you reconcile your bank statements, you’re comparing the transactions that are recorded in your bank account with the transactions for the same period in your accounting software.
Here’s a step-by-step guide to bank reconciliations in QuickBooks, that you can use the next time you need to tackle this process in your business or job.
1. Open the Reconciliation Page
The first thing you need to do to do bank reconciliation in QuickBooks accounting is to open the reconciliation page. You can do this by clicking on the company gear icon in the top right corner, clicking on “Tools” and then clicking on “Reconcile.”
2. Set Your Date and Balance
Once you’re on the reconcile page, you will see a drop-down menu at the top of the page. Use it to select the account you want to reconcile.
Next, you need to set the Statement Ending Date and enter the Ending Balance from the bank statement you are working with, and then click Start reconciling to complete the process.
4. Check Your Transactions
Some of the transactions that are transferred from your bank feed will be manually entered, and there’s always a chance that something might be doubled up, so at this point, you want to check each transaction to make sure they are correct. You should be able to cross-reference these quickly with the paper version of your bank statement.
5. Check Important Figures
There are a few more important figures you need to check while you’re reconciling your bank account. Make sure that the starting and ending balances are correct, and that the difference is zero. This is an indicator that your reconciliation is correct because all the figures add up to the correct amounts. If your reconciliation does have a difference, you probably need to recheck your entries.
6. If There Is a Problem
If there is a problem at this point, and you can’t figure it out before completing the reconciliation, you can cancel the reconciliation before you complete it. This allows you to go back into the software, find the problem, and fix it before you try again.
7. Complete the Process
If everything balances out, you have two options to complete the reconciliation process. You can choose to “finish later” or “finish now.” These are quite self-explanatory. If you choose “finish later” your information will be saved until you decide to proceed. It’s worth noting that you can still edit the statement information if there is a problem with your reconciliation.
8. Reconcile Other Accounts
The process we’ve described above is for bank reconciliation, but you can do the same with your other accounts, including your payroll, petty cash, loan accounts and others. It’s all very simple and intuitive, and the process is quite simple to follow.
Simply choose a different account in step 2 and follow the steps until you’ve completed the job.
Make It Even Easier to Use QuickBooks Data
There’s no denying that QuickBooks accounting is one of the best accounting software options out there. There’s a reason it’s the most popular accounting software in the world!
However, even QuickBooks can’t do everything on its own. This is why we are building LiveFlow, to make reporting in Google Sheets even easier for QuickBooks users.
Our Google Sheets integration makes it quick and easy to connect QuickBooks and Google Sheets, and lets you pull QuickBooks data directly from the program for reporting in Google Sheets.
This means that when you’re finished with bank reconciliations and other important processes, you can quickly, easily and securely share that information with people who need to know the numbers – even if they don’t have access to QuickBooks.
This is, perhaps, one of the best things about QuickBooks. It’s designed to work with a host of third-party tools and applications, which make it even easier for accountants and bookkeepers to get their jobs done.