As a small business, you may find yourself paying vendors and creditors by issuing check payments. To ensure that your books are accurate, it’s important to reconcile your bank, credit card and petty cash accounts. You should also compare the figures on your accounts to the figures on the original bank statement. This will make sure that nothing has how to calculate beginning year accumulated depreciation been recorded incorrectly.
Step 1: Review your opening balance
- In registers, cleared transaction have a C in the reconciliation status column and reconciled transactions have an R.
- If your beginning balance in your accounting software isn’t correct, the bank account won’t reconcile.
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- Make sure you’re using the very first bank statement for that account.
- The beginning balance in the summary at the top of the QuickBooks reconciliation screen must equal the beginning balance on your bank statement.
Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you. If you have been at it for a while and you need a break, revenue recognition principles QuickBooks allows you to pick up where you left off. Click the Finish later button to save the work you have done so far.
Sometimes, taking a breather can help you spot what’s causing the difference. Once you verify that you are on Business View, click on Switch to Accountant view to update the appearance of your sidebar menu. In a few seconds, you should see the same left-side menu bar illustrated in this tutorial. If you forgot to enter an opening balance in QuickBooks in the past, don’t worry.
Review: What are bank reconciliations?
This way, you can ensure your business is in solid standing and never be caught off-guard. This is a simple data entry error that occurs when two digits are accidentally reversed (transposed) when posting a transaction. For example, you wrote a check for $32, but you recorded it as $23 in your accounting software. Book transactions are transactions that have been recorded on your books but haven’t cleared the bank.
Investigate Unmarked Transactions in QuickBooks
The process of completing a bank reconciliation could take up to two hours, but can be completed within half an hour on some occasions. The main things are to make sure that the figures on both statements match and there is nothing unusual or suspicious recorded in the transaction history. Triple-check the statement balance, service charge, and interest income you entered from the bank statement. Make sure the service charge and interest income are only entered during the reconciliation if they aren’t already in QuickBooks.
Changes can cashier’s check vs. money order unbalance your accounts and other reconciliations. It also affects the beginning balance of your next reconciliation. Now, simply compare the transactions on your statement with what’s in QuickBooks. The tricky part is making sure you have the right dates and transactions in QuickBooks so you know everything matches.
Before you start with reconciliation, make sure to back up your company file.
To complete the reconciliation process, you must verify that the difference is zero. If it is, then click the green Finish now button in the upper right-hand corner of the screen, as seen in the sample completed reconciliation below. Here’s how you can review all of your cleared transactions. (If you’re in the middle of reconciling, stay on the page you’re on and skip to step 4). In this example, we show you how to reconcile a bank or credit card account.
Add any transactions that are missing from QuickBooks by clicking the green Finish later button and entering the transactions as normal. If the difference is not zero, we recommend that you try to locate transactions that aren’t recorded in QuickBooks. If you still can’t fix the discrepancy, we cover troubleshooting tips on finding the difference later on, after Step 5. There will be very few bank-only transactions to be aware of, and they’re often grouped together at the bottom of your bank statement.