Reconciliations are one of the most important tasks that bookkeepers can do to ostend that all of the transactions are in the accounting organisation (QuickBooks Online in this case). I talk about reconciliations a lot in my courses. Today, I wanted to share a portion of the QBO Month Stop Principal Course where I speak to the importance of reconciliations and how to prepare them in QuickBooks Online. I too point out all the options nosotros have to employ on the reconciliation screens and more.
How to Perform Reconciliations in QuickBooks Online
Transcript
Why are Reconciliations Important?
So allow's talk about our reconciliation options, and nosotros're gonna go through these next slides a little quickly and then nosotros're gonna go into QBO then that you can see more of like how it all works and running effectually and stuff, but earlier I practice that, let'south talk about, pace back and let's talk about reconciliations and why we're doing reconciliations and why information technology'due south so of import.
If you go back and think nigh the fiscal statement assertions that we talked about in the starting time chapter, nosotros wanna make sure that our accounts are complete and they're accurate, that we have everything in here, that everything is booked in the right area. So it's really important to practice these reconciliations. They're a way to lock down the transactions for a month. In one case you lot practice a reconciliation on a transaction, it is marked as reconciled and if you try to change it, you're going to get an fault message that yous tried irresolute it and is this okay and stuff similar that. So it is kind of locking it down for you lot.
Matching QuickBooks to the Bank Statement
And then with the reconciliation, the concept is that our ending residue in QBO is going to match the ending rest of the bank account. Then we are verifying that those ii systems match each other.
Now more often than not, the balances are unlike, right? For some reason or another. And, it's our job through this reconciliation procedure, to effigy out why it's different and if that difference is because of something that is inaccurate or if information technology's because of something that is accurate and information technology'due south just a change that volition happen over time.
Duplicate Transactions
Then, an instance of inaccurate is if we take duplicate transactions, well one cleared the bank, one didn't because it's a duplicate. That is an inaccurate transaction that we need to remove from the bank business relationship, and so we're not overstating what is in the bank account or understating what is in there.
Uncleared Checks
On the other side, maybe nosotros wrote a bank check to someone inside the electric current month that nosotros're reconciling merely it hasn't cleared the bank however. That'southward actually, actually common, right? So with that, it's okay, it'south an adequate transaction to have within our depository financial institution reconciliation. Information technology'due south something that hasn't cleared the bank yet and hopefully, it clears the side by side month when we do the reconciliation over again for that adjacent calendar month.
The QuickBooks Reconciliation Screen
Hither is the reconciliation screen. Hither's how we're accomplishing all of that. Yous can see the statement ending balance, then this is coming off of the banking company statement and so the cleared balance is what is in QBO. We want the difference of the ii to be nil, right guys? We desire information technology to exist cipher.
So some things to notation on these screens,
We have the gear icon where you tin adapt the table right here, and I'll evidence you lot a picayune fleck more than of that in a second.
Then we have options to filter things with payments, deposits, or all.
Now here you lot tin come across the cleared date, this is something newer within QBO, where this is the date that came, that came from the bank feed itself, and so the bank posted the information, it came through to the bank feed and nosotros entered it so it's the divergence between when the transaction engagement is and when information technology actually cleared the bank, which is a nice little thing to be looking at, right?
And then we likewise accept several more than filter options on here and to be able to pinpoint stuff.
So permit'south take a look within QBO and so we can move around a picayune bit ameliorate. Okay, and then hither we are on the reconciliation screen inside my exam visitor. And so this is the beginning where we put in our information.
Beginning Balance Alarm
Yous already see right hither it'due south similar concur on, your account isn't prepare to reconcile. I beg to differ on this one. This little mistake message that comes upwardly, if there is a deviation in your beginning residue or something like that, yes, you can employ these tools to fix it, only let's just check and come across what's going on inside the area so that we tin, perhaps we can prepare information technology within the bank reconciliation screen, maybe we don't demand that extra tool in here.
So if nosotros come into checking, okay, pick my account, yep, my beginning remainder is off for some reason, it's $1,000 off. We put in the ending balance and our ending date. Guys, maybe I don't know my catastrophe balance right now. I merely wanna check out what's going on. So I do this, start reconciling.
Well first of all, here's my $1,000 deviation, okay, that's from awhile ago, great, I tin take care of that. That gets rid of, fixes that residual. Simply hey, look, this edit info screen, it lets me change this amount so maybe I want it to exist here. Nosotros'll just update it. So you can alter that. Y'all can change the date and that information right hither.
Flexibility in the Reconciliation Screen
So information technology'south flexible, don't freak out that you lot didn't get the right information when y'all started information technology. Once more, I have this, it'southward cleared in here, high likelihood that when your beginning balance is off and you are in charge of the accounting and everything, as long as you lot're in control of well-nigh of this process with the transactions, biggest likelihood is it'south already sitting in hither when the corporeality is off.
You're just gonna come in here and cheque it off and you'll fix it. You don't take to go through that other screen to work on things. So allow's look at some of these options.
Gear Icon
So I told you the gear icon. And then we can come in here and I can become rid of the reference number, payee, this sort of stuff. I tin can change the density, woo-hoo, of these things. Information technology's all usability to try to make life easier for you when yous're doing these reconciliations.
Now again, if you were in control of the accounting process and yous're doing the banking concern feeds, then this really, actually bank correction should only have a couple seconds because if you're using bank feeds, it's all cleared, it'due south already pre-checked off, and y'all should be good to go, correct?
But if not, then we need some aid with this screen, so mayhap I just wanna look at deposits because that's the offset part of the bank argument. I just wanna click off all of those start and so I can get into payments and I tin can click off of those considering that'due south the way the banking company statement's shown to united states. I can go dorsum to all, I tin sort whatsoever of these, whichever way I want to. Again, you have tons of options.
The Cleared Engagement in QuickBooks Reconciliations
Sometimes I just sort by number if I can't notice something 'crusade that way I can become to the number faster, right? And then y'all know similar I showed you earlier, the cleared date, the date of the transaction versus the cleared date. So sometimes you lot might find something that, so like these transactions didn't articulate, what if your dates are similar 2 months autonomously? Well maybe for a check, but if it's for an expense or something you brought in, and then maybe information technology was non matched to the correct transaction, and maybe yous actually need to unmatch that, fix it, clean it up, and you know, it'll work ameliorate going forward.
Statement Catastrophe Date Filter in Reconciliations
So y'all know how the ending appointment happens and then in this example 5/31, maybe QBO booked a transaction on half-dozen/i just it was actually on the 5/31 statement, you tin get rid of that little Ten, so it automatically stops it for y'all at five/31 and if I get rid of it, and so I tin can see more transactions in hither, I tin reset information technology, transport information technology right on back to the v/31 ending date.
Filter Options in QuickBooks Reconciliations
Here are all my filter options. Once again, this is great when you're trying to notice stuff to consummate your bank rec, just the majority of cases if you lot're doing all the work, you shouldn't take to utilize all this stuff. You tin can merely look for certain bills, you lot know, anything that is a bill in here, okay, I didn't accept any. Allow's see, I run across credit card credit, utilise. Okay, I take 1, correct? So I have that, I can become down to a specific corporeality, all of this stuff in here, guys I can practise.
Manually Changing Reconciled Transactions
Now if yous aren't finding the transaction you demand in hither, it'due south possible that information technology's already been reconciled, and if information technology's been reconciled in a prior menses or something like that and it shouldn't be, and then you can actually go into the bank annals, then if I come up into hither, this is a little bonus information, you can see here, you lot can manually change this information. And then like I just got rid of the R and I salvage it. I can come back in hither, I can change it to a C which just means cleared, it'southward non a hard reconcile. And over again, when we have a C and we go in and we get for the reconciliation it'south already gonna cheque off this transaction for us. And I tin salvage it, or I can come up back in here, reconcile.
Why is there a Kickoff Remainder and the Account Was Never Reconciled?
Merely a few things to note over again, if information technology has an R on it, no matter the fourth dimension period, so if I'yard doing the May 31st bank reconciliation and this transaction is in August, I volition non see this transaction in my banking concern recs, even if I say testify me all periods going forward. Just considering it has an R, it is going to show upwardly as reconciled and it'due south going to affect my ending balance in hither. So, or my beginning residual in hither.
And so i of the common problems that people have is when they set up up a new account, it pulls in the last xc days or 60 days, any it is, only you have that commencement balance in there. And sometimes, QBO but puts in an entry to opening residual equity for that kickoff remainder. It'southward similar hither, I'k merely plugging it in for you. Well they automatically put an R on it, and then when you become in to reconcile for the first time, you have a commencement balance, and y'all're like no, I've never reconciled this account, how can I have a commencement remainder? This is not possible. Well, you wanna go into the banking concern register and look for that R and get rid of it because that is throwing everything off for yous.
Changing the Ending Balance and Ending Appointment on the Reconciliation Screen
So if we get dorsum into this reconciliation screen, resume reconciliation, hey, I fixed this, I can get through all of here, I can click everything. Maybe some of these transactions didn't articulate in the calendar month and actually, I'm going backwards into information technology, peradventure my ending balance should've been $7548.35 on the bank account. I can come in here, change that. I'm showing you lot what you can practise, don't exercise this just because you don't have a bank statement. Make sure yous get the bank statement and run off of that, please. But so we also take these other options, then we tin can end now, which will close it out. It will mark all of these transactions as R in the banking company annals.
Reconciliation Adjustments
If there's a departure, we get the option to record a reconciliation adjustment. Another one, delight don't practice large reconciliation adjustments. I'g okay if it's a couple cents or a dollar, but if it'south a lot, then that means you lot did something wrong and spend the time to fix it, delight.
Reconciliation Saving Options
Save for Later
So we can finish now, I tin can salvage for subsequently, and then if I relieve for subsequently, it'southward saved, all the information I've done so far is in there so I can resume the reconciliation. Everything that I had checked off before is at present notwithstanding checked off and I can just stop it out.
Shut without Saving
If I do close without saving, it removes all of this data, information technology removes everything I put in for the ending balance, the date, everything I checked off, it gets rid of it all. So be extremely careful when you're closing this out if you are not done to do relieve for later. In that location are just a few instances when you wanna exercise close without saving but virtually of the fourth dimension you want to save for later, okay?
To become more preparation on reconciliations, check out the QBO Month End Principal Course or the QBO Cleanup Master Course. Both are bachelor as OnDemand training.
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