How to: Bank Reconciliation in QuickBooks | Accounting Tips

 

Bank Reconciliation in QuickBooks Video Tutorial

In this accounting tips video, you will get step-by-step instructions on how to perform a bank reconciliation in QuickBooks.

What is a bank reconciliation in QuickBooks and why is it important?

Performing a bank reconciliation in QuickBooks  is the process of comparing your internal financial records against your bank accounts’ records. Monthly bank reconciliations help catch any unfamiliar transactions, prevent fraud, or correct accounting errors. It is important to reconcile all of your personal or company bank accounts, to provide a clear picture of your cash flow or how much cash is really available – gaining visibility on your finances. When you process a Bank Reconciliation in QuickBooks, you help avoid bounced checks, overdrafts, and ensures A/P transactions have cleared.

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Bank Reconciliation in QuickBooks – Step-by-Step Instructions

 

1. Prepare: Import banking transactions into QuickBooks by implementing either of the following methods

  • Automatically connecting your bank account to QuickBooks
  • Importing bank activity from a QBO file to QuickBooks
  • Batching transactions by downloading bank activity from your bank in an Excel CSV File
  • Manually entering transactions by hand keying them

2. In Bank Statement: Note bank account’s beginning balance and ending balance, ending or current statement date

 

3. In QuickBooks: Under the Banking section, Select Reconcile

  • Record ending or current statement date
  • Record ending balance
  • Click Continue

4. In Reconciliation Details:

  • Imported transactions will be listed
  • List all checks and payments, deposits and other credits
  • Check box for “Hide transactions after the statement’s end date”
  • Go through bank statement, and check off transactions that have cleared
    – Deposits
    – Checks & Payments – electronic payments, purchases through ATM, and checks cut
  • On the bottom right hand corner, note the Ending Balance booked from the bank statement, the cleared balance of transactions checked, and what the difference is. The cleared balance will begin to decrease with every cleared transaction that you check off
  • The difference should hit $0 in order to successfully perform a bank reconciliation in QuickBooks
Bear in mind, checks that haven’t cleared in over a month should be researched. Review transactions that are remaining. Make sure they make sense.

 

5. To finish the bank reconciliation, click “Reconcile Now”

 

6. Report:

  • A QuickBooks popup will prompt you to select the type of Reconciliation report
  • Select “Detail” for a Reconciliation Detail that provides a breakdown of all the checks, payments, deposits, and credits that have cleared that month, and uncleared transactions.

 

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