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Reconciling statements with your QuickBooks company file is an important part of account management. It ensures that QuickBooks entries align with those in your bank and credit card account statements.
Having up-to-date and accurate accounts is important for any business.
Reconciliation is a process that you should aim to complete regularly. With QuickBooks, there are ways to speed up or even automate the process. Reconciling does not need to be entirely manual these days.
|This piece has been written in collaboration with Esther Friedberg Karp, an esteemed bookkeeper and Advanced QuickBooks ProAdvisor.
Reconciling is an important task that you should carry out regularly. As such, you will quickly get used to the steps needed.
To carry out a reconciliation, you will need to have your monthly bank or credit card statements on hand. These could, of course, be from multiple providers. These statements can be online or paper statements.
You also need to ensure that the opening account balance shown in QuickBooks is correct. This is especially important the first time that you carry out a reconciliation. The opening balance should match your bank account balance period in question.
Finally, you need to make sure all transactions are matched to already-entered transactions, or categorized and added if there is no such transaction entered already. QuickBooks will attempt to match downloaded transactions to previously-entered transactions to avoid duplication. If this happens, you will need to approve the match.
|🔍 The For review tab shows transactions to be checked for matches or categorization and adding.
QuickBooks has a built-in reconciliation function. Select the account you wish to reconcile from the Account drop-down menu.
You need to check and ensure that the Beginning balance matches that on your account statement.
You also need to set the Ending balance and the Ending date as shown on your statement. This could be referred to as closing balance by some banks or providers.
You can then select Start reconciling to begin the reconciliation of each transaction in that account.
For online connected accounts. QuickBooks will load the statements and facilitate a side-by-side comparison. If QuickBooks is not connected to online accounts, the statements will not be loaded.
Follow these steps:
During a reconciliation, you compare an account in the accounting system, such as QuickBooks, to its real-life counterpart to make sure everything matches. A reconciliation confirms the accuracy of the QuickBooks account.
A reconciliation of a bank or credit card account compares the statement to what is in QuickBooks. This is for a specific period. This is the same idea as balancing an account and checkbook in more manual times.
Frequent reconciliation is important to ensure your QuickBooks accounts remain accurate. Reconciling accounts once per month is good practice.
Keep in mind that processing delays can lead to certain transactions not clearing the account in a timely fashion. The aim is to explain in detail the difference between any statement account balances and their corresponding QuickBooks balances.
Over a short timeframe such as a month, differences between the two balances can exist (due to bank errors or checks that have not been cashed by the payee, for example).
Frequent reconciliation has further benefits. It helps you know the true, up-to-date value of your business. It can also help with account audits and tax preparation by catching errors early.
Once connected, all bills in QuickBooks Online will sync in real-time with Wise. You can then choose which bills to pay through Wise. Bill payments are automatically synced, matched, and categorized in QuickBooks.
Automated syncing is an excellent addition to QuickBooks and Wise. It will lessen the amount of manual reconciliation and unnecessary cross-checks. You can be more confident that accounts will be up to date and accurate.
Most business owners are used to carrying out frequent account reconciliations.
There are some important things to bear in mind about reconciliation using QuickBooks:
- Reconciliation between QuickBooks and statements must be carried out regularly. Once a month is good practice.
- Reconciliation ensures accurate and up-to-date accounts and helps discover any errors early.
- Reconciling aims to explain and detail any difference between the balances of QuickBooks accounts and the corresponding statement of the source account.
- With connected online accounts, QuickBooks can import transactions for easier reconciliation.
- Wise Business users can benefit further from time-saving automatic reconciliation.
- Categorize and match online bank transactions in QuickBooks Online
- Reconcile an account in QuickBooks Online
- What's a reconciliation?
- Connect Wise with QuickBooks Online
All sources checked June 24, 2022.
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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