Reconciling your accounts might sound like a chore, but it’s one of the most important habits you can build for keeping your business books accurate. Whether you’re managing a business checking account, savings, or credit card, reconciling ensures that your QuickBooks records match your actual bank and credit card statements.
In this post, we’ll walk through why reconciliation matters, how to do it in QuickBooks, and offer tips to make the process smooth and stress-free.
What Is Reconciliation?
Reconciliation is the process of comparing the transactions in QuickBooks to your actual bank or credit card statement to ensure they match. If everything lines up, your account is “reconciled,” which confirms that your books are accurate.
Why Reconcile Your Accounts?
• Catch Errors Early: Mistakes can happen—duplicate entries, missing transactions, or data entry errors. Reconciliation helps you find and fix them.
• Prevent Fraud or Unauthorized Charges: Regular reconciliation helps you spot suspicious transactions.
• Stay Ready for Tax Time: Accurate books mean smoother tax prep and fewer surprises.
• Improve Cash Flow Tracking: You’ll always know how much money you truly have available.
How to Reconcile in QuickBooks Online
Here’s a simple step-by-step overview:
Step 1: Gather Your Bank or Credit Card Statement
– You’ll need your statement for the period you’re reconciling. Look for the beginning balance, ending balance, and the statement date.
Step 2: Go to the Reconcile Tool
– Click the Gear icon (⚙️).
– Under “Tools,” select Reconcile.
– OR, from the left navigation pane, go to the Transactions tab, then click Reconcile.
– Choose the account you’re reconciling (e.g., Checking, Savings, Credit Card).
Step 3: Enter the Statement Info
– Input the Ending Balance and Ending Date from your bank or credit card statement.
– QuickBooks will auto-fill the beginning balance if you’ve reconciled this account before.
Step 4: Match Transactions
– Compare each transaction from your bank statement to the list in QuickBooks.
– Check off each transaction that appears on your statement.
Tip: If a transaction is missing in QuickBooks, it might not have been entered or downloaded yet. If it shouldn’t be there, you may need to edit or delete it.
Step 5: Review the Difference
– When all statement transactions are matched, the difference should be $0.00.
– If there’s a small difference, double-check for typos or missing/extra entries.
Step 6: Click “Finish Now”
– Once the difference is zero, click Finish now to complete the reconciliation.
Tips for Successful Reconciliation
• Reconcile monthly: Align it with your bank and credit card statements.
• Use bank feeds, but verify: Downloaded transactions save time but still require your review.
• Investigate differences: Don’t force a reconciliation with journal entries. Instead, find the root of the issue.
• Avoid changing past reconciled transactions: This can cause your books to go out of balance.
What If Your Accounts Don’t Reconcile?
Check out the next blog post: Simplifying Your Bookkeeping: What to Do When Your Reconciliation Doesn’t Match in QuickBooks.
Final Thoughts
Reconciling your bank and credit card accounts is like checking your work—it ensures everything adds up and builds trust in your financial data. The more consistently you do it, the easier and faster it becomes. Best of all, accurate books give you peace of mind and a clearer picture of where your business stands.
Note: QuickBooks Online has different versions (e.g., Simple Start, Essentials, Plus, Accountant). Some features or menu labels may vary slightly depending on your subscription level.
If you require additional assistance with QuickBooks, please feel free to contact us.