How to Setup Bank Reconciliation on Quickbooks

A Bank Reconciliation on Quickbooks is an E-Balancing of your company bank accounts, such as checking or savings accounts. A reconciliation suits items you enter into QuickBooks software with items that physically clear your account. It’s most important to perform this characteristic to catch any transactions that may not be listed in QuickBooks. Some small-business owners use the running bank account balance feature in the QB software. If your real bank balance doesn’t match your QuickBooks balance, you can error payments for expenses that your company doesn’t have the funds to cover.

  • Click on the “Company” menu on the top of your Home screen.
  • Click the “on your Accountant” menu. Choose the “Reconcile” option.
  • Enter the account and you wish to reconcile in the “Account” box.
  • Enter the bank statement date from the account statement then you wish to balance.
  • Observe the opening balance shown for your physical bank statement and the opening balance shown on the start balance box on your QuickBooks reconciliation display screen. If the two balances do not match, click on the “locate Discrepancies” button on the reconciliation page. This option allows you to search various reports in QuickBooks to determine why your statement balances do not match. Your balances must match to carry out a correct reconciliation.
  • Enter the ending balance shown on your physical account details in the “Ending Balance” box of the reconciliation screen.
  • Add non-account transactions to the reconciliation page. Examples of non-account transactions consist of service fees charged through the financial institution or interest you earn from the bank for the money you maintain to your Accounts. Enter service charges as a price and interest you earn as income. Choose the applicable income or expense account you use to keep track of these types of activities.
  • Choose the “Continue” button to proceed with the reconciliation.
  • Match transactions that appear in the reconciliation window with transactions that appear on your bank information. When you find a match, then check the box in the reconciliation window that corresponds with your bank details transaction. This tells QB the item has cleared your account.
  • Verify the “Difference” value at the bottom of your reconciliation screen is null. If the difference is not null, you must locate additional transactions not listed in QB. Once the difference is null, click “Reconcile Now.”
  • Click the “Finish” button when the reconciliation process is Finished. If you must stop the reconciliation for any reason, click the “Leave” button to stop & save the reconciliation. You may return & complete the process later when you make this selection.

Why Bank Reconciliation in QuickBooks Is Important

In your personal bank accounts, it is important that you reconcile your business bank accounts on a monthly basis. Reconciling is the process of matching the transactions on your bank statement to what you have recorded for your accounting software.

Reconciliations your bank accounts regularly helps to ensure:

  • Discrepancies are resolved quickly: Any discrepancies between your records and the banks are resolved in a timely manner.
  • Timely notification of any fraudulent transaction: Reconciling your bank account consistently alerts you to fraudulent activity sooner. For example, if you notice transactions listed on your bank statement that you did not authorize, you can notify the bank as soon as possible so they can investigate.

Benefits of Preparing Bank Reconciliations on QuickBooks Online

There are several benefits of preparing bank reconciliations in QB. First, you can be confident that all transactions on the bank statement are recorded in QuickBooks. Second, your profit & loss & balance sheet reports are automatically updated as you record transactions. Third, transactions are marked cleared in QuickBooks like they are with your bank. Finally, you can generate bank reconciliation reports that show the details of all cleared and uncleared items.



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