LUTZ BUSINESS INSIGHTS
getting ready to reconcile in quickbooks
jimmy burgess, senior accountant
If you’ve ever reconciled a bank or credit card account manually, you know how challenging it is. The good news is that QuickBooks has built-in reconciliation tools. The bad news is it can still be difficult to get your statement and QuickBooks to agree.
If you want to try to tackle it yourself, there are a few steps you should take before you reconcile for the first time.
1. Understand the process.
It’s similar to the old manual method. As you find entries in QuickBooks and your statement that match, you’ll be putting a checkmark in the column in QuickBooks to indicate that the transaction is reconciled. When you’re done, the difference between the two should be $0.00. If it’s not, QuickBooks will offer suggestions. These may or may not solve your problem.
2. Make sure you have created a bank account in QuickBooks to mirror your real-life account.
We don’t normally recommend that you go into QuickBooks’ Chart of Accounts and change anything, but if you haven’t yet created a checking account in the software, you’ll need to do so before you try to reconcile. You may also want to set up accounts for credit cards, loans, etc. We can show you how.
3. Know what the Beginning Balance for the reconciliation is.
This is different from the opening balance for your bank account. It’s the beginning balance printed at the start of your statement. Once you’ve done a reconciliation successfully, QuickBooks will use the ending balance from the previous reconciliation for the next one.
4. Be aware of the service charges and interest-earned amounts that have been applied by the bank.
You’ll be entering these in the Begin Reconciliation window in QuickBooks. Your account will not reconcile if you don’t apply these.
5. Enter any missing transactions for the period you’re reconciling.
If you’ve connected QuickBooks to your online bank, this will not be so difficult. If you haven’t, we recommend you consider it. It’ll be far easier than going to your bank website and looking for each transaction individually.
6. Back up your company file before you reconcile.
Open the File menu and hover over Back Up Company, then click Create Local Backup. Click the Options button and complete the fields for a local backup (like a USB drive). Click OK, then Next. Choose Save it now in the window that opens, then Finish. There are other backup options that we can go over with you.
QuickBooks does a good job of walking you through the reconciliation process, and it tries to help when you can’t get the numbers to match. But making that happen can be difficult. It’s much easier if you can work with a pro who knows where to look for problems. We can help you master the mechanics of reconciliation in QuickBooks or simply complete the task for you every month. Contact us to set up a consultation.
ABOUT THE AUTHOR
JIMMY BURGESS + SENIOR ACCOUNTANT
Jimmy Burgess is a Senior Accountant at Lutz with over four years of relevant experience. His primary focus is to provide outsourced accounting to clients with a focus on QuickBooks, tax and payroll compliance, small business consulting, as well as software implementation training.
AREAS OF FOCUS
- Outsourced Accounting Services
- Tax & Payroll Compliance
- Small Business Consulting
- Software Implementation & Training
- Construction Industry
AFFILIATIONS AND CREDENTIALS
- Nebraska Society of Certified Public Accountants, Member
- Certified Public Accountant
- BS in Business Administration and Accounting, University of Wyoming, Laramie, WY
- Youth Sports Coach, Volunteer
- Getting Ready to Reconcile in QuickBooks
- Your Chart of Accounts: What You Should Know
- 8 Reasons QuickBooks is the Automated Accounting Software Your Business Needs
- 5 Tips for Creating Effective Estimates
- Smart User Management Key to Data Security
- What You Need to Know About Accounting to Use QuickBooks
- Customers Behind on Payments? How to Create Statements
- 5 Steps to Getting Started With QuickBooks
- New to Accounting? 7 Practices You Should Adopt
- 3 Reasons Why Tax Planning Should Be a Year-Round Journey
QUICKBOOKS PROADVISOR CERTIFICATIONS
SIGN UP FOR OUR NEWSLETTERS!
We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.