It is recommended to carry out periodic reconciliation in QuickBooks to find out and correct mistakes in the journal entry. However, often, when you are carrying out the reconciliation, you might run into QuickBooks bank reconciliation problems. This might be because some QuickBooks reconciliation discrepancies might be too difficult to resolve, or you simply couldn’t find the root cause.
In instances like this, you might find that the numbers just don’t add up, however many times you check and cross-check. The good news is that a professional approach to troubleshooting QuickBooks bank reconciliation problems often resolves the issue. Therefore, we have compiled an in-depth guide on how to resolve QuickBooks bank reconciliation problems. Go through this article and implement the methods given to carry out bank reconciliation smoothly.
Want to get your QuickBooks reconciliation done correctly in no time? Let an expert take care of the issue. Dial 1(800) 580-5375 now and talk to our QB ProAdvisor about your QB issue.
Introduction to Bank Reconciliation
Let us first get to know what reconciliation is and why you must carry it out.
What is Bank Reconciliation in QuickBooks?
One should review the QuickBooks account with the bank statement to ensure that QB entries match the real-life realities. Reconciling is the process of matching the two accounts.
Reconciliation should be done whether you have connected a bank account to QuickBooks or a credit card account.
Why Do You Need to Do a Bank Reconciliation?
QuickBooks bank reconciliation is of crucial importance for business accounting and bookkeeping. It has many benefits, and that makes conducting bank reconciliation in QuickBooks mandatory. First, QuickBooks bank reconciliation helps find the mistakes in journal entries. It is important to balance the sheets.
Thus, reconciliation increases the accuracy of the financial records and makes them reliable for generating financial reports and powerful insights. Thus, the business can use this data for cash flow enhancement, finding scope for improving efficiency and profitability, and more.
Moreover, QuickBooks reconciliation is also important for detecting and preventing fraudulent activities.
How to Reconcile Your Bank Account in QuickBooks
If you haven’t been reconciling the credit card and bank accounts in QuickBooks, you now know why you must start reconciling.
QuickBooks bank reconciliation is a comprehensive procedure, and therefore, we have drafted another detailed guide on it. Consult the “How to Reconcile in QuickBooks Desktop Guide” to check the detailed steps for QB bank reconciling.
What is QuickBooks Bank Reconciliation Discrepancy?
When you reconcile the journal entry with the bank statement, you match the two records to find the dissimilarities. We call the difference between QuickBooks records and bank or credit card statements a QuickBooks bank reconciliation discrepancy.
QuickBooks bank reconciliation discrepancies are when the figures in QuickBooks don’t match the bank statements.
Can’t Reconcile Bank Account in QuickBooks?
Have you cross-checked and matched your QB transactions with the bank or credit card statements and the numbers still don’t add up? Reconciliation is an exhausting process, and it often becomes tricky.
Let us look at different reasons why your QB records and bank transactions don’t match.
Possible Reasons Why QuickBooks and Bank Statements Don’t Match
The QuickBooks ending balance and the ending balance you see on the bank statement might not be the same because:
- Someone entered incorrect transactions in QuickBooks.
- A transaction is either missing or entered twice or more in QuickBooks
- A transaction was deleted or changed after the last reconciliation.
- The opening or beginning balance at the beginning of a financial period was entered incorrectly.
- Incorrect adjustments were made to close off the last reconciliation.
Now, let us move on to diagnosing and fixing the QuickBooks bank reconciliation problems.
Troubleshooting QuickBooks Bank Reconciliation Problems
Follow the steps listed below one by one to resolve the bank reconciliation issues in QuickBooks.
Step 1: Check and Verify the Beginning and Opening Balances
Now, opening balance and beginning balance are two different things in QuickBooks.
The opening balance is the balance you had when you initially made your QuickBooks account. Thus, it is the original beginning balance. When you connect QuickBooks to a bank account, it automatically registers the bank balance as the opening balance. However, you can edit and change this opening balance. If the opening balance was set wrong in the beginning, it would affect all the upcoming reconciliations and beginning balances.
The beginning balance is the starting balance when the accounting period, such as the month or quarter, begins. QuickBooks automatically uses the ending balance of the last reconciliation period as the beginning balance of the next reconciliation period. If you happen to enter the beginning balance incorrectly, it will affect the reconciliations and beginning balances that follow.
Thus, you need to check and make sure that the opening balance and the beginning balances are set correctly.
Check the Opening Balance
Here’s how you can check the opening balance:
- Navigate to Settings
- Click on Charts of Accounts.
- Choose the account and click on View Register.
- Now, locate the opening balance equity in the account column. It will help you find the opening balance entry in the memo column.
- Note down the amount and date of the opening balance entry somewhere.
Now, check the beginning balances for different accounting periods and reconciliations. Match it with the bank statements and check if they are right.
If everything turns out alright, you can move to the next step. However, if there were mistakes in the opening or beginning balance, you will need to correct them. It isn’t straightforward to correct the opening balance or beginning balance just like that, as it will affect the reconciliations done after the date that entry was made.
Thus, consult an accountant before you make these changes.
Step 2: Run Reconciliation Discrepancy Report
With the help of the reconciliation discrepancy report, you can find the changes that were made after the last reconciliation. Here’s how you can access the report:
- Click on Reports.
- Hover over banking.
- Now, choose the right account and click on OK.
- The report and the changes will appear on the screen.
- Now, verify all these changes and check which of them are correct.
- Note down the transactions or changes that you find incorrect and get to know more about them.
- You will need to correct these incorrect changes.
It isn’t easy to correct some changes that might affect the reconciliations done after the date that entry was made. Thus, consult your accountant before you make these changes.
Step 3: Run Missing Checks Report
You can use the missing checks reports to find and trace the transactions that might or should not be part of your QuickBooks ending balance. These missing checks might cause QuickBooks bank reconciliation problems.
Therefore, run the missing check report with the help of these steps:
- Click on Reports.
- Hover over missing.
- Now, choose the missing checks option.
- Now, choose the right account and click on OK.
- The report will appear on the screen. Review the transactions that are different in the bank and QuickBooks.
Talk to an accountant and edit these transactions to resolve QuickBooks reconciliation discrepancies.
Step 4: Run Transaction Detail Report
Now, let us go into the depths of the transactions that were changed to find and resolve QuickBooks bank reconciliation problems.
- Click on Reports
- Hover over Custom Reports.
- Click on the Transaction Detail option.
- Choose Display.
- Now, set the Date From to the earliest available. You can alternatively leave it blank.
- Set the Date as the date of your last reconciliation.
- Next, move on to the filters.
- In the accounts section, select the right account.
- Select the date of your last reconciliation in the Entered/Last Modified field.
- Set the Date to today’s date.
- Finally, select OK and run the report.
- Verify all the transaction changes you see in the report and check if these match your bank statements.
If they are incorrect changes, get to know the reason for the change. If required, you can edit the transactions. When editing the transactions, keep in mind the reconciliations and how they will affect them.
Step 5: Study the Reconciliation Adjustments
Reconciliation adjustments may result in a QuickBooks reconciliation disagreement. Users might make reconciliation adjustments to balance the book. When they do, though, the adjustments show up in an account called Reconciliation Discrepancies. That is what we are now looking into.
This is how you can verify the changes:
- Go to Lists followed by the Charts of Accounts.
- You may now notice a date selection option.
- Select the reconciliation dates.
- You’ll be able to view every adjustment.
- Examine these adjustments and check if they are correct.
Make the necessary edits if you discover a mistake. Remember that this doesn’t unbalance the book.
- Verify and whether the QuickBooks reconciliation issues persist.
Step 6: Redo the Last Reconciliation
The issue may have originated with the last reconciliation. If nothing helps, your best bet is to do the last reconciliation again.
As a result, you might have to reverse the previous reconciliation and start over. But before you do, we suggest that you speak with your accountant once.
The above blog will guide you to find the root cause of QuickBooks bank reconciliation problems and fix them. If the problem persists, or you find the methods hard to follow, give us a call at 1(800) 580-5375. Our QB ProAdvisors are available 24/7 to provide real-time assistance to you.