Reconcile Bank and Credit Card Accounts

Reconciliation is the procedure of comparing financial transactions that you have entered in the QuickBooks software with the bank/credit card company’s records. It is enormously suggested that you should reconcile the bank & credit card accounts in QuickBooks software on a daily basis to make sure the accuracy of accounting records. More in particular, reconciliation assists to ensure that:

  • All the financial transactions such as payments, reports, deposits, statements, and bank fees are accounted for in QuickBooks.
  • All financial transactions in the QuickBooks bank register, as well as its ending balance, compare what you have in your actual bank account.

In this article we are going to explain you how to Reconcile Bank and Credit Card Accounts in QuickBooks. This in-depth guide will help you to understand the complete procedure of bank reconciliation in QuickBooks software.

Make sure that you consider the following points before you start reconciling the account:-

  • Create the backup of the QuickBooks company file.
  • Set up the bank/credit card account in the QuickBooks with the accurate beginning balance.
  • Type-in or feed all the uncleared financial transactions for the statement period.
  • Received a copy of your bank or credit card statement.

Reconciliation Process

You will see the two main screens on your system as you start & complete the bank account reconciliation process.

Begin Reconciliation Window

In this particular window, you have to select the bank account to reconcile & analysis all the details associated to it. It is essential that all information in this window is correct before proceeding to the next step.

To go to the Begin Reconciliation window, go to the “Banking” menu and click on the “Reconcile” tab.

For users with QuickBooks Merchant or Payments account:

If QuickBooks Desktop finds that you are not signed in to your Payments account, a Sign In prompt will show up. This is to ensure that your account is effectively signed in as well as connected to a legitimate company ID.

Reconcile your Bank
  1. In the “Account” section, choose the bank/credit card account which you desire to reconcile.
  2. The Statement Date will be filled in automatically. Usually, it supposes to be 30 or 31 days after the statement date you entered for the previous reconciliation. You can alter or modify whenever needed.
  3. The Beginning Balance will be filled in automatically. It is the total of all formerly cleared transactions. Ensure it is the equal to the opening balance present on the statement.
  4. In the “Ending Balance” section, type-in the corresponding balance from the statement.
  5. If the financial reports demonstrate a service charge/interest that you haven’t yet type-in into the QuickBooks records, mention those amounts into the “Service Charge” and “Interest Earned” field. Do NOT type-in the charges that you have previously type-in as QuickBooks financial transactions.
  6. Click on the “Locate Discrepancies” icon to spot the available financial reports that will assist you to track discrepancies & other reconciliation problems. There is an option to “Undo” & “Restart Reconciliation” tab at the “Locate Discrepancies window”.
  7. Click on the Undo Last Reconciliation button if the fixation requires by you to revert to the former reconciliation.

Why do we have to undo last financial reconciliation?

You will usually require to undo the last financial reconciliation when you cannot figure out the discrepancies during QB reconciliation or if you wish for changing the date of the opening balance. Note that after you undo the earlier reconciliation, the beginning financial balance will revert to the preceding beginning balance & all the previously cleared financial transactions will be uncleared.

  1. If all details are right, click on the “Continue” tab to carry on to the Reconcile window.

Reconcile Screen

In this screen, you will be able to refine the preference which you would like to match against the bank statement. This is where you choose the financial transactions to clear. If this screen illustrates a zero difference once you choose all the financial transactions that show on the statement, if this is so then congratulations! You can just have to simply click on the “Reconcile” tab and your account reconciliation is done.

Reconcile screen
  1. Conceal financial transactions after the statement’s end date: Put the confirmation mark in the box if you wish to show the financial transactions covered only by the statement period you are performing task on. This will aid to avoid perplexity especially if you are “behind” in the reconciliation process.
  2. Type-in the Transactions in QuickBooks: These are listed & separated into two fields – the Checks and Payments (Money out) and Deposits & other Credits (Money in).
    1. In case, you are reconciling the credit card account, the fields will be Charges and Cash Advances (purchases) and Payments and Credits (payments to the credit card company).
    2. Verify the financial transactions against what you have on the actual bank or credit card statement.
    3. Select only that one which appear on the statement & make sure the amounts are the identical.
    4. Note that as you choose transactions, the Cleared Balance changes.

What if there are Numerous Financial Transactions?

In such case by default, the financial transactions are scheduled according to date. If there are a lot of financial transactions for statement period, it may be easier for you to resort transactions, especially if you’re trying to find a transaction with a specific amount, reference, etc.

  • Click on the “header/title” column you would like to resort.
  • Clicking on it once automatically sorts the financial transactions.
  • Clicking on it a second time will reverses the sort.
  • For instance, if you would like to organize financial transactions according to the amount, click on the “Amount” column header.
  • The financial transactions are rearranged in ascending or descending sequence.
  1. Items marked as clear: This field displays the total number, total amount of Deposits, and Check that you have chosen. Some bank endows the identical summary of the financial transactions on their statement. Looking at this section will save your precious time if you want to verify for the discrepancies.
  2. Mark All/Unmark All: Click on any of these buttons that will select/deselect the financial transactions. If you reconcile on a customary basis and if all transactions for the statement period were entered correctly, selecting all the financial transactions at once may contribute a lot to save time. Just ensure the reconcile window shows a zero difference between the ending balance and cleared balance.
  3. Go To: Click on this button to open/edit the financial transaction from the reconciliation screen. This is helpful if you want to do small edits on the financial transaction before you mark it reconciled or cleared.
  4. Matched: If the account you’re trying to reconcile is setup for online banking, click on this button will automatically choose the financial transactions that were downloaded & auto-matched.
  5. Columns to Display: Choose this specific button to select the sections you would like to display.

Now question Comes that Why it’s Necessary to Select Columns?

By default, QuickBooks software shows the Date, Amount, Payee, and CHK # columns. But only for the Amount column, you can add or remove the other areas to assist you to avoid perplexity. For instance, if the statement demonstrates the reference # for most the financial transactions, you can select to present only the CHK # & AMOUNT columns. With this method, you can effortlessly locate and mark the financial transactions.

  1. Modify: Press this particular button if you want to do modifications in the last minute on the details/information’s that you typed in into the Begin Reconciliation window.
  2. This field endows you with a peep of the reconciliation figures.
    1. Service Charge, Ending Balance, and Interest Earned: All of them are based on the amount that you have entered for these areas in the Begin Reconciliation window.
    2. Cleared Balance: The figure reduce when you select/clear the checks and payments & increases when you select/clear the deposit and other credit amount.
    3. Difference: This endows you with the difference among the beginning balance that you have entered and the cleared balance (the financial transactions that you have chosen so far). In the ideal conditions, this difference should be zero.
  1. Leave: Select the “Leave” button if you want to operate other account or to edit financial transactions after moving out of the reconcile window.

What will happen if I click on the “Leave” button?

QuickBooks software maintains the track of financial transactions that you have already manifested as clear – that is, they remain checked in the Reconcile window. Go to the account register, an asterisk (*) is appeared in the cleared column of the financial transactions that you have marked until the reconciliation process have been completed. The asterisk symbol signifies that the financial transaction is awaiting or pending because QuickBooks bank account reconciliation with the financial statement hasn’t finished completely.

When you are prepared to resume the reconciliation process, you have to go back to the “Begin Reconciliation” window, re-enter the beginning balance & proceed with reconciliation as usual.

  1. Reconcile Now: Choose the “Reconcile Now” button in a situation where you are done selecting all the financial transactions.

What will happen next?

In case, the difference is zero: QuickBooks software will save the reconciliation & shows the “Select Reconciliation Report” window. Select the category or type of report and later perform click on either the “Display” or the “Print” tab. Select the “Close” tab in case you do not want any financial reports at this point of time.

QuickBooks software endows you the choice to select among the “Reconciliation Summary” or “Reconciliation Detail” report, or you can choose both of them. Though it doesn’t show after you finished the reconciliation process, the Reconciliation Discrepancy Report is also available in QuickBooks to assist you to figure out any problem or issue that occur while reconciling the account.

If the difference is anything but zero: QuickBooks software shows the “Reconcile Adjustment” window. The choices exist in this window are:

If you want to find the journal entry, you can:

  • Return to Reconcile: If you want to go back to the preceding window.
  • Leave Reconcile: If you want to move out of the reconciliation window so that you can review or edit existing financial transactions that are causing the problems.
  • Enter Adjustment: If you would like to finish the reconciliation procedure even if you didn’t get a zero difference on the preceding window. QuickBooks software will automatically type-in the Journal Entry under a special expense account known as Reconciliation Discrepancies. You can verify & edit it as required by going to the Chart of Accounts.
    • Use the Find feature.
      • In the “Edit” menu, click on the “Find” tab.
      • In the “Find” window, navigate to the “Advanced” tab and choose the “Memo filter” icon.
      • Under the “Memo” section, enter the “Balance Adjustment” and later, click on the “Find” tab.
      • Any balance adjustment will be displayed.
    • See the Previous Reconciliation report.
      • In the “Reports” tab, click on the “Banking” tab => “Previous Reconciliation” tab.
      • Under the “Cleared Transaction” field, the “General Journal Entry” will appear at the top in a situation where the balance adjustment was made.

For Credit Card Accounts: If the ending balance is anything except zero, QuickBooks software will pop-up the “Make Payment” window & redirect to write a check or enter a bill to pay for the outstanding balance. If you do not desire to record payment, you can click on the “Cancel” tab.

Reconciliation Discrepancies

You may come across technical hassles while reconciliation of the bank/credit card account. Discrepancies are mismatches caused by financial transactions in the account that don’t agree with your printed statement. Below are two of the available resources dealing with mismatches and other reconciliation issues?

  • Zero or incorrect Beginning Balance in the Begin Reconciliation Window
  • Fix reconciliation discrepancies

I hope, with this technical article you will be enlightened with the deep knowledge about the bank & credit card reconciliation. However, if still you have any doubts or problems associated with this particular topic – you can freely take the advanced assistance of the QuickBooks certified technicians and ProAdvisors. Dial our QuickBooks enterprise customer support helpline number .i.e. +1-800-880-6389.   



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