How to Reconcile Account, Bank Statement, Credit Cards in QuickBooks

QuickBooks provides you with a Reconcile utility that can help you to reconcile the credit card account of your organization with the card paper statement. You need to review your accounts in QuickBooks just like balancing your checkbook to ensure that they match your bank and credit card statements. This process is known as reconciling. You will contrast each transaction with those recorded in QuickBooks after you have your bank statement in hand. Your accounts are balanced and accurate if everything matches. Your checking, savings, and credit card accounts should be reconciled each month. 

Any time you receive a paper statement, reconciling your credit card account can allow you to catch any unusual, incorrect, or missing purchases that can lead to an inaccurate account balance. In addition, the program would automatically open up the option to pay the bill after the reconciliation process is completed. With this guide, you can easily learn the process for how to reconcile a bank statement in QuickBooks Desktop as well as in QuickBooks Online.

What’s a Reconciliation in QuickBooks?

When you reconcile, you check the accuracy and consistency of two connected accounts by comparing them. You must perform this review in QuickBooks, just like you would when balancing your checkbook. To ensure that they correspond with your actual bank accounts, you should frequently reconcile your bank and credit card accounts in QuickBooks.

How reconciliation works

When you reconcile, you compare the information in QuickBooks for a specific time period with the information on your bank statement. It’s up to you to make sure everything lines up. The final difference between QuickBooks and your bank accounts should be US $0.00, though sometimes there may be a tiny discrepancy due to payment processing.

When to reconcile

Every month, you should reconcile your accounts. Each time, you will get more knowledge about your company and be able to relax knowing that the data in QuickBooks is entirely true. You benefit from reconciliations in the following other ways.

• Real-time knowledge of the net worth of your company.
• Catch errors to make tax preparation much simpler.
• Improve the way you interact with your accountant.

Reconcile an Account in QuickBooks Desktop

You should review your accounts in QuickBooks to make sure they line up with your actual bank and credit card bills, just like you would when balancing your checkbook. Reconciling is the action of doing this.

Your checking, savings, and credit card accounts should be reconciled each month. Check the list of transactions on your bank statements against what you entered into QuickBooks after receiving them. Your accounts are accurate and balanced if everything matches.

Step 1: Review your opening balance

• Make a backup of your company file before you begin the reconciliation.
• Review the opening balance if you are reconciling an account for the first time.

Step 2: Prepare for the reconciliation

• Make sure to include every transaction for the time period you intend to reconcile the bank statement.
• Wait to enter transactions that haven’t cleared your bank yet and aren’t reflected on your account.

Step 3: Start your reconciliation

You can begin reconciling as soon as you receive your bank statement. Start with your earliest bank statement if you’re reconciling multiple months. Each month should be reconciled separately, one statement at a time.

Important: A sign-in popup will appear if you are reconciling a Merchant or Payments account and QuickBooks Desktop detects that you are not logged in. This guarantees that a valid company ID is successfully linked to your account.

• Select Reconcile from the Banking menu.
• Choose the bank or credit card account you want to reconcile in the Account area.
• The Statement Date is filled in automatically. It usually occurs 30 or 31 days following the statement date of the prior reconciliation. If necessary, adjust it to reflect your bank statement.
• The Beginning Balance is also automatically entered by QuickBooks. This figure is calculated using the ending balance from your last reconciliation.
• Your bank statement’s ending balance should be entered.
• Based on your bank statement, enter the service charge and interest earned. Don’t add charges that are already in QuickBooks.
• Review the fields. Pick Continue or OK if the information is correct.

Don’t worry if your beginning balance differs from your statement. You have a few tools that can help you out.

• Choose Locate Discrepancies if the numbers don’t add up. This provides you with reports you can use to identify disparities and other problems with reconciliation.
• Here’s how to fix your opening balance and beginning balance if you’re still having problems.
• Choose Undo Last Reconciliation if you need to start afresh from scratch.

Step 4: Compare your bank statement and QuickBooks

• Simply compare the list of transactions on your bank account to those in QuickBooks to perform a reconciliation.
• Make sure your dates and transactions are accurate. You will know everything entered into QuickBooks once you have finished reviewing your statement.

Before you begin take some steps…

Here are some steps you can take to simplify your reconciliation.

• Select Hide transactions after the statement’s end date if you only want to see transactions for the current statement period.
• Charges and Cash Advances (purchases) and Payments and Credits (payments made to the credit card company) are the parts to look at while reconciling a credit card account. You have to focus on one time at a time.
• You have to select Matched if you are reconciling an account for online banking. Add the Statement Ending Date from your bank statement after that. This immediately picks up and matches the transactions that QuickBooks downloaded.

• Select the header or title of a column to sort the list.
• The list should be checked if there are more transactions in QuickBooks than there are on your bank statement.

Match your transactions

• Start with the first transaction on your bank statement once you are ready.
• In QuickBooks’ Reconciliation window, you have to find the same one.
• You have to compare the two transactions. Select the checkbox and place a checkmark in the checkbox column if the transactions match. This reconciles the transaction.
• The transactions on your statement should be compared to those in QuickBooks. The Cleared Balance amount decreases as transactions are cleared or added to the reconciliation. If you add or clear deposits and other credit amounts, the total rises.

Do not mark a transaction as reconciled if it does not appear on your statement. Here are a few quick ways to see if everything matches.

• Look for the Items you have marked cleared section to view the total number and dollar amount of transactions you contributed to the reconciliation. On bank statements, several banks offer the same summary of transactions. To determine if any transactions are missing, compare the total number of transactions.
• Select the transaction, go to it, or double-click if you want to change it or learn more about it.
• If you need to go back and change the data you submitted in Step 3: Start your Reconciliation, choose Modify. The section next to it contains information on the service fees, interest, and ending balance.

• When you’re done, there should be no difference between your bank statement and QuickBooks should be $0.00. If so, choose Reconcile right away.

What to do if Balances Don’t Match at the End of Reconciliation

Don’t worry if the difference is not $0. You have a number of options in QuickBooks to fix it. QuickBooks opens the Reconcile Adjustment window for bank accounts. You have the following options.

• Return to Reconcile: Go back to the reconciliation so you may go over everything once again.
• Leave Reconcile: Save the reconciliation so that you can review or edit any current transactions that are causing problems. You can return at a later time to complete the reconciliation.
• Enter Adjustment: You can direct QuickBooks to create an adjustment to balance everything if you wish to finish the reconciliation. Only do this if you are confident that QuickBooks contains all of the relevant transactions and that the data you supplied is correct. The adjustment is automatically recorded as a journal entry by QuickBooks.

A special spending account named Reconciliation Discrepancies receives the journal entry.

Review the reconciliation adjustment

You can examine a Previous Reconciliation report for the reconciliation you adjusted to get a list of all of your adjustments. This will display any cleared transactions and post-transaction changes that might not have been shown in your discrepancy.

• Firstly, you have to go to the Edit menu, then you have to select Find.
• Select Memo from the Advanced tab in the Find window.
• Then in the Memo field, you have to type Balance Adjustment, then you have to select Find.

Review the cleared transactions

Here’s how you can look over every cleared transaction you have made.

• You have to select Reports Center from the Reports menu.
• Open the Previous Reconciliation report by searching for it.
• Select the reconciled account, then choose between Detail, Summary, or Both.
• Then you have to select Transactions cleared, and you have to select that if any changes made to those transactions since the reconciliation.
• Then you have to select Display.

The Make Payment window is displayed by QuickBooks for accounts of other sorts. This enables you to settle the remaining debt by writing a check or entering a bill to be paid. Select Cancel if you do not want to record a payment.

Don’t worry  if you have problems or discrepancies, which means that transactions in QuickBooks don’t match up with your bank statement.

Next Steps: Review the reconciliation

You can select Display to view the Reconciliation report or Print to print it, after you reconcile. Your work is completed.

If you want to review a reconciliation report later on:

• You have to go to the Reports menu, then you have to select Reports Center.
• Then you have to search and then open a previous Reconciliation report.
• Now you have to select the account that you reconciled, then either Detail Summary, or Both.

How to Reconcile a Bank Statement in QuickBooks Desktop

Reconciling a bank statement in QuickBooks Desktop is an easy process if you have the correct information. Here are the reliable steps to begin the reconciliation process in QuickBooks.

The Begin Reconciliation Window

You select the bank or credit card account in this window to reconcile the details. Then all the information that suits it can be checked by the user. Before continuing to the next stage, all the information in this window must be accurate. Navigate the Banking menu and then click Reconcile within the same window.

• In the Account field, pick the account you want to reconcile with your bank or credit card account.
• The user will see immediately that the Statement Date is there. It is typically 30 or 31 days after the date of the previous sentence.
• If you need then you can change it accordingly
• Beginning Balance is filled in automatically. This is the sum of all previously straightforward transactions.
• Also, make sure it is the same as the opening balance that is displayed on the statement
• Enter the corresponding balance from your statement within the Ending Balance field
• If your bank statement contains service costs, interest earned that you have not entered into your QuickBooks, add parts of those numbers to the Service Fee and Interest Gained
• Do NOT enter the payments you have already entered for QuickBooks as transactions
• To see available reports that will help you document discrepancies and other issues of reconciliation, click Locate Discrepancies
• In the Locate discrepancies window, you will also be given the option of Undo & Restart Reconciliation
• Click the Undo Last Reconciliation button if troubleshooting helps you to return to prior reconciliation.
• Once you verify all the information is correct then hit Continue to proceed to the Reconcile window.

How to Reconcile Credit Cards in QuickBooks Desktop?

Reconciling your credit cards in QuickBooks Desktop is a great way to keep your finances organized and track your expenses. You can reconcile your accounts every month to make sure that you are spending the money that you have available. This will help to avoid overspending and ensure that you are keeping track of your finances.

• In the beginning, go to the Banking section and select “Reconcile” within the Begin Reconciliation window
• Using the drop-down menu, select the Account >> Credit card account under the “Credit Cards”
• In the Statement Date section, insert the date of the credit card statement and then make sure the starting balance on the credit card statement matches the sum in the Beginning Balance field of the program
• You need to correct the opening balance in the credit card account if the opening balances do not match
• Open the “Lists” menu, and then choose “Chart of Accounts“
• To correct any inaccuracies, pick a credit card account, and then enter the correct opening balance or edit the transactions within the register
• From the credit card statement in the Ending Balance section, enter the ending balance
• Fill out the fields within the section named “Enter Any Finance Charge” if there are any finance fees.
• For eg, in the relevant fields, enter the amount of the finance charge including the date
• To open the Reconcile window, click the ‘Continue’ button, and then select the checkbox labeled ‘Hide Transactions After End Date of Declaration’
• Click on each transaction in the window which appears on the credit card statement
• Clicking on a transaction puts a checkmark next to it and marks it as cleared automatically.
• If the difference value shows ‘0.00’ that indicates the account is successfully reconciled.
• Click the ‘Make Payment’ button to open the ‘Reconcile Now’ window.
• Select the radio button “Payment” such as “Write a Check For Payment Now” and then press “OK”
• This action opens the payment option window such as the Write Checks window so that the credit card bill can be charged
• It also automatically opens the Pick Reconciliation Report window.
• Click ‘Reconcile Now’ to open the ‘Make Payment’ screen
• Choose the radio button named “Payment”, for example, “Write a Check For Payment Now then hit “OK”
• After this step, a payment choice window opens such as the Write Checks window to make payment for the credit card bill
• It also opens the Pick Reconciliation Report window automatically
• From the Reconciliation Report window select the radio button which is next to the form of reconciliation report you want to display, such as the Summary Report
• To view the report, click Display or click the ‘Print’ button to print it
• To close a window, press the “Close” button.

How to Reconcile in QuickBooks Online?

Follow the steps by steps instructions to reconcile in QuickBooks Online without any hassle.

• Initially, click the Gear button and then go to the Tools section
• Next, select the “Reconcile” option
• Using the drop-down menu, select the account that you wish to reconcile under Accounts
• Enter the appropriate “Ending balance” as well as “Ending date” as per your bank statement information
• Now, match the transaction with your bank statement
• Make sure, you verify them one after one
• After that, apply Filters that becomes easier in finding the transactions
• Keep continuing until the difference field becomes “Zero”
• And finally, you can see the completed or Success page!

Reconcile an Account in QuickBooks Online

You must check your accounts in QuickBooks to make sure they line up with your bank and credit card bills, just like when you balance your checkbook. Reconciling is the process of doing this.

The transactions on your bank statement will be compared to those recorded in QuickBooks once you have them in your possession. Your accounts are accurate and balanced if everything matches. Every month, you should reconcile your credit card, checking, and savings accounts. 

Step 1: Review your opening balance

• Review the opening balance if you are reconciling an account for the first time.
• It must coincide with the balance in your actual bank account on the day you made the decision to begin keeping track of transactions in QuickBooks.
• Don’t worry if you have previously neglected to submit an opening balance in QuickBooks. Here is how to later enter an opening balance.

Step 2: Start a reconciliation

You can begin reconciling once you have your monthly bank or credit card statement. Start with your oldest statement when reconciling many months, go through each statement one at a time:

• Make sure to categorize and match each downloaded transaction if your accounts are connected to online banking.
• Reconcile can be found under Settings (take me there). Select Get started if this is your first time reconciling.
• Choose the account you want to reconcile from the Account menu. Verify that it matches the one on your statement.
• Then you have to review the Beginning balance. Verify that your statement’s beginning balance matches the one in QuickBooks. If they don’t match, follow these instructions.
• On your statement, enter the Ending balance and Ending date. In certain banks, the final balance is referred to as the new balance or the closing balance.
• Review the Last statement ending date if you see it. Your most recent reconciliation’s end date is indicated here. The next day is when your current bank statement should begin.
• Select Start Reconciliation when you are ready to begin.

Step 3: Compare your statement with QuickBooks

Simply compare your statement’s transactions with those in QuickBooks at this point. Review each one separately. Making ensuring QuickBooks has the correct dates and transactions so you know everything matches is the tough part.

Follow the section for the type of account you’re reconciling:

Reconcile any online banking-connected accounts

Since your bank is the only source of information regarding your transactions, reconciling should be simple. Your accounts may already be balanced in some cases.

• You have to start with the first transaction on your statement.
• In QuickBooks, you have to find the same transaction in the Reconciliation window.
• Both transactions should be compared. Put a checkbox next to the amount in QuickBooks if they match. That designates it as reconciled. Transactions that you added or matched from online banking are already chosen for you to speed up the process.
• Don’t checkmark a transaction if you can see it in QuickBooks but it doesn’t display on your statement.
• The transactions on your statement should be compared to those in QuickBooks.
• When you are done, there should be no difference between your statement and QuickBooks. If so, click Finish right away.

Reconciliation of accounts not linked to online banking

Not a member of an online banking site? No issue. What you should do is:

• Start with the statement’s very first transaction.
• In QuickBooks, you have to find the same transaction in the Reconciliation window.
• Both transactions should be compared. Put a checkbox next to the amount in QuickBooks if they match. That designates it as reconciled.
• Don’t checkmark a transaction if you can see it in QuickBooks but it doesn’t display on your statement.
• Each transaction on your statement should be compared to what is in QuickBooks.
• When you are done, there should be no difference between your statement and QuickBooks. If so, click Finish right away.

Next steps: Review past reconciliations

To review your work, run a reconciliation report.

• First, you have to go to Bookkeeping or Accounting, then you have to select Reconcile.
• Then you have to select History by account.
• To choose the account and the date period, use the dropdown options. If you need to share your reconciliation reports, you can also print or export them.

Hope the above information will help you to Reconcile in QuickBooks Desktop. If you have any doubt then connect with QuickBooks consultant for help.

Frequently Asked Questions