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Reconciliation

Bookkeeping reconciliations in QuickBooks involve comparing and matching financial transactions recorded in your company's books with those in your bank or credit card statements. The primary goal of reconciliation is to ensure that the financial records in QuickBooks accurately reflect your actual financial position.

Why is this Important?

Regular and accurate reconciliations are crucial for several reasons:

  • They help identify errors or discrepancies in financial records.

  • They ensure that all transactions are accounted for, reducing the risk of fraud or financial mismanagement.

  • They provide an accurate picture of your business's cash flow and financial health.

By regularly reconciling your accounts in QuickBooks, you can maintain the integrity of your financial data and make informed business decisions based on accurate information.

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The Process

  1. Access Reconciliation Section:

    • In QuickBooks, you typically access the reconciliation section through the Banking or Transactions menu.

  2. Select Account:

    • Choose the bank or credit card account you want to reconcile.

  3. Enter Statement Information:

    • Input the statement date and ending balance from your bank or credit card statement into QuickBooks.

  4. Review Transactions:

    • QuickBooks will display a list of transactions that have been recorded in the system for the selected account. Compare these transactions with the entries on your bank or credit card statement.

  5. Mark Cleared Transactions:

    • As you verify each transaction on your bank statement, mark them as cleared in QuickBooks. This indicates that the transaction has been confirmed as matching with your statement.

  6. Reconcile Discrepancies:

    • If there are discrepancies between QuickBooks and your statement, investigate the reasons for the differences. Common reasons include missing transactions, data entry errors, or bank fees not recorded in QuickBooks.

  7. Adjustments:

    • Make any necessary adjustments in QuickBooks to correct errors or omissions. This may involve adding missing transactions, correcting amounts, or deleting duplicate entries.

  8. Finish Reconciliation:

    • Once you have reconciled all transactions and the difference is zero, complete the reconciliation process. QuickBooks will prompt you to create a reconciliation report, which provides a summary of the reconciliation for your records.

  9. Review Reports:

    • Review the reconciliation report to ensure that all adjustments and corrections are accurate. Save the report for your records and future reference.

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