Reconcile in QuickBooks desktop is one of the common things that occur in QuickBooks from time to time. In order to ensure the accuracy of the financial records, the reconciliation process is performed at regular intervals of time. However, if you wish to reconcile a transaction of any account in QuickBooks, you must compare it with the transaction that the financial institution provides. The reconciliation process is a time taking and complex procedure; however, QuickBooks Desktop simplifies the complete procedure with the help of QuickBooks Desktop\’s Bank Feature.
Before we proceed to how to reconcile in QuickBooks desktop procedure, you must have a comprehensive knowledge of the financial terms. This blog will try to explain reconciliation, how to reconcile in QuickBooks desktop, and why it is crucial for you.
What is Reconciliation in QuickBooks?
To validate the accuracy of your financial transactions, you must ensure that your QuickBooks transactions and the financial statement provided by your real-time bank or credit card statements are in synchronization. This is known as reconciliation.
How to reconcile in QuickBooks Desktop?
Learn how to reconcile in QuickBooks desktop so that they match the transactions of your bank statement or credit card..
Step 1: Review your Opening Balance
Before you start the reconciliation in the QuickBooks desktop procedure, make sure that you have backed up your data. In order to create the backup, go to the file menu of QuickBooks and select the switch to single mode user. Again go to the file menu and pick the \”backup company\” option. After that, select create local backup and click on the next button. Save the file at desired location. . In the Online and Local back up section, select the complete verification and select OK. You can choose from the options when you want to create the backup.
If you are reconciling the account for the first time, review your opening balance. If your opening balance and the beginning balances are correct, proceed further.
Step 2: Prepare for Reconciliation
The users must ensure that they have entered all the transactions that are required for the reconciliation process. If there are statements that the bank does not clear, wait for them
Step 3: Start the Reconciliation Process
Once the user receives all the statements, they can start the reconciliation in the QuickBooks desktop process. If you are verifying the transactions of multiple months, start with the older month. It is advised that you must reconcile each month separately, one statement at a time.
The steps involved in the reconciliation process are as follows:
- In the banking Menu, select the Reconcile option.
- After that, move to the Account field, and select the account you want to reconcile.
- The statement date is filled automatically. It is usually 30 or 31 days after the statement date of the previous reconciliation statement. However, you can change the dates also as per your requirement.
- QuickBooks automatically pick up the beginning balance. It is usually the ending balance from the last reconciliation.
- Feed the Ending balance from your bank statement.
- Next, you must enter the service charges and the interest earned per your bank statement. If you have already entered the charges in QuickBooks, do not enter them again.
- Review it, and if everything is correct, press \”OK\” to continue.
However, if your beginning balance does not match your statement, do not worry. There are a few tools that will help you out.
- Select the Locate Discrepancies if there is a variation in the numbers. It will generate the report, and you can easily find out the discrepancies or other issues.
- If the issue still persists, you can begin from scratch or undo the last reconciliation.
Note: If you choose to undo the last reconciliation, your beginning balance goes back to the beginning balance of your last reconciliation.
Step 4: Compare your Bank Balance Statement and QuickBooks
Just compare the QuickBooks transactions with the statements that your financial institution provides. For the proper reconciliation in QuickBooks desktop, please make sure that the dates mentioned and the chosen transactions are correct. After completing the reviewing process, you will come to know about the transactions that are added to QuickBooks.
Step 5: Match Your Particular Transaction
- If you are ready, begin with the particular bank transactions and locate the same on the reconciliation screen in QuickBooks.
- Compare both transactions. Put a checkmark in the checkmark window; It will reconcile the transaction.
- Compare the transactions with the QuickBooks transactions. The Cleared balance decreases or increases if you edit the transactions.
- If the transactions do not match, do not mark it as reconciled. Perform the actions required to match the things.
- Once the transactions are matched, select Reconcile Now.
Step 6: Review the Reconciliation process
Once the reconciliation process is finished, you can view the report. Your work is completed, and you can print or download the report. To review the report later on, just go to the Report menu and choose Reports Center. Open the previous reconciliation report and select the account you reconciled.
What to Do When Balances Do Not Match At the End
In the end, you can fix this issue if you do not get a difference of $0.00. Open the QuickBooks Reconcile Adjustment window for the bank accounts and choose any of the below-mentioned options:
- Return to Reconcile: Review everything again and start the process again.
- Leave the Reconcile: You can save the reconciliation process. Complete the reconciliation process after some time.
- Enter Adjustments: You can ask QuickBooks to make adjustments to balance out everything. One should perform this step only when they are 100% sure that the transactions entered in the QuickBooks are accurate.
Things to Consider Before Starting The Reconciliation Process
Just keep in mind the below-mentioned things in order to quicken the reconciliation process in QuickBooks desktop.
- If you wish to see the transactions only for the particular period you are working, hide the statements after the statement\’s end date.
- In credit card accounts, there are options for charges, payments, cash advances (purchases), and credits. Focus on one section at a time.
- For an online banking account reconciliation, choose match and add the statement ending date from your bank transactions. It will select the QuickBooks matched and automatically download it.
- For sorting the list, you can select the header or the title of the column.
- If the transactions in QuickBooks exceed the transactions of your financial statement, resort to the list.
When To Reconcile?
Just like balancing your checkbooks, you must also review your savings, credit cards, and checking accounts. It is advised that you must reconcile your bank accounts once every 30 days. Once you have received the statement from your financial institution, you must cross-verify it against every transaction in QuickBooks. If every transaction matches, then your bank accounts are accurate; however, if the transaction does not matches, it causes the issue.
Reconciling in QuickBooks desktop is an important process. It ensures the validity and accuracy of financial statements. We hope that the steps mentioned earlier have solved your query about \”how to reconcile in QuickBooks desktop.” If you are looking for more informative blogs, read our other blogs on QuickBooks. Stay connected, stay updated.
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