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Welcome to the
Quick Books Online training course.In this lesson we are going to cover how to
reconcile bank accounts in Quick Books

To follow along with me log into
your QuickBooks Online account now or click the link below for a free 30-day
trial of QuickBooks Online. You can also .click this link to access our full
QuickBooks Online course and other. helpful resources. Lets get started.
Similar to your personal bank accounts. it is important that you reconcile your
business bank accounts on a monthly basis. Reconciling is the process of
matching the transactions on your bank statement to what you have recorded in
QuickBooks. Reconciling your bank accounts regularly will help to ensure
any discrepancies between your records and the banks are resolved in a timely
manner, and timely notification of any fraudulent transactions. For example if
you notice transactions listed on your bank statement that you did not
authorize, you could notify the bank as soon as possible so that they can
investigate. Some of the benefits of reconciling your bank account in
QuickBooks are: all transactions on the bank statement get recorded in
QuickBooks, your financial statements such as the profit and loss statement
and the balance sheet are up to date click the links below to learn more
about the profit and loss and balance sheet reports), all of the reconciled
transactions are marked in QuickBooks as cleared, and finally you are able to run
bank reconciliation reports that will provide the details of the items that
have cleared the bank and those that remain outstanding. Before we walk
through the steps of how to reconcile, .be sure that you have your bank statement
handy for the account that you want to reconcile, we will refer to the bank
statement often during this process From the homepage of your QuickBooks Online
account you want to go ahead and click on the gear icon located here in the
upper right hand corner. And right below tools the third option is reconcile.
The first thing that you want to do is go ahead and select the bank account that
would like to reconcile from the drop-down. After selecting your account
you might see a notification similar to this one here. So if your beginning
balance does not match, you will see this notification which lets you know that
you need to go ahead and fix that before you proceed with the current reconciliation.
So at some point someone accidentally probably made a change to a
transaction that was reconciled last month,. .>and so now in this example we;have
got a difference of $0.. .>Now the nice thing about the
reconciliation process is you can simply click this link that says &#;we can help
you fix it&#; and walk through the steps to go ahead and fix that out of balance.
You don&#;t want to proceed with the reconciliation until this has been fixed
otherwise you won&#;t be able to balance at the end. The next step you want to do
is go ahead and enter the ending balance thats on your current bank statement
that you want to reconcile to, and also enter the corresponding ending statement
date in this field here. If you have finance charges or any kind of interest
charges on your bank statement, go ahead and indicate the date here and the
finance charge amount in this field as well And once you&#;ve completed all of
these fields you can click the start reconciling button here at the bottom.
Here is the new and improved reconciliation layout. So let&#;s talk
about what&#;s here. Statement ending balance: this is the amount that we just
entered in the previous screen from the actual bank statement. The beginning
balance is the amount of the ending balance from last month&#;s statement.
QuickBooks will automatically populate. .>this field for you. The cleared balance
is going to accumulate as you begin to reconcile each item in this screen. This
amount will change depending on whether0. .>you have selected a payment or a deposit
transaction.. .>The payments amount will increase as you
select payments to reconcile from the. .>detailed transaction section below. And
the deposits amount will increase as you.0 .>select deposits to reconcile from the
detailed transactions below. The difference. .>here is calculated by QuickBooks.
the difference between your statement. .>balance and the cleared balance. Our goal
is to get to a difference of 0. In the. .>transaction section below, you will see
all of the payments and deposits that. .>have been recorded in QuickBooks as of
your statement ending date. You can. .0>filter this section simply by clicking
on the tab. So we can click on payments. .>to see just payments only, we can click
on the deposits tab to see just deposits only,.0 .>or we can go back to the default
which shows all payments and deposits.. .>There is no right or wrong way to
reconcile. However, I suggest that you. .0>reconcile the area with the least number
of transactions first. Remember that our. .>goal is to make sure that every deposit
and withdrawal listed on the bank .>statement has been marked cleared in
this reconciliation window. To mark an. .0>item as cleared you simply want to click
the radio button here in the far right. .>column to select that and that item will
be marked as cleared. So let&#;s say that .>we want to go ahead and start with our
deposits. As we know that has the least. .>amount of transactions. And so with the
deposits you could actually look at your. .>bank statement and mark each deposit
individually, or if you see all of these. .>listed here then you can go ahead and
click the top radio button which will. .>select all. And this is just confirming
that we want to select all of the. .>transactions listed here. So we&#;ll say
yes select all here. So once you have. .>marked all the deposits in this window
that appear on your bank statement,. .>you want to verify that the total deposit
amount cleared matches the total. .>amount on your bank statement. So in this
example here are total deposits that. .>we have marked as cleared equal $., and if. .>that matches what&#;s on your bank
statement then you are ready to move on.0 .>to payments. If it does not match, then we
are going to cover tips on how to. .>troubleshoot out of balances in just a
few minutes. So we&#;ll go ahead and go to0. .>the payments tab and we will repeat the
same process of marking all of our items.0 .>as cleared, or as I mentioned you may
want to do one by one since they .>going to be several transactions here.
So you don&#;t want to assume that. .>everything listed is on your bank
statement. So again we want to verify. .0>that the total payments amount here that
we&#;ve cleared matches our bank statement.. .>So in this example the total payments
equals $,.,.0 .>you want to double check and
make sure that that also matches what&#;s. .>on your bank statement. Again if your
withdrawals or payments amount is out of. .>balance, we&#;re going to discuss ways that
you can troubleshoot this issue in just. .0>a few minutes. Once all of your deposits
and withdrawals have matched the bank. .>statement, you should have a difference
of 0, which is our goal. So now that we. .>have our difference of 0, we can go
ahead and click the finish now button to. .>generate our bank reconciliation reports.
So when we click this button, behind the. .>scenes QuickBooks will mark all of the
deposits and credits and payments that. .>we;have reconciled as cleared. So let&#;s go
ahead and run our report. And so you have. .>got the option to just click done and
not view the report, or go ahead and view. .>the report which is what we want to do.
And so here is our reconciliation report.. .>And so at the top here is a summary, just
a summarized view of the checks and. .>payments that cleared. And then down
below you&#;ll see each individual item. .>for the withdrawals and the deposits
that actually cleared. So I want to share. .>a couple tips with you here. The first
one is: it&#;s important that you save all. .>bank reconciliation reports for every
bank account. The easiest way to do this. .>is go ahead and create a folder (I would
suggest one folder for each bank account). .>and save each report so you should have
at least one reconciliation report for. .>each month for each account into those
folders. To learn more about organizing. .>key reports and documents such as this,
check out our small business bookkeeping guide.. .>Click the link below to access
this guide. My second tip I want to share. .0>with you is: bank reconciliation reports
are one of the top five reports that. .>auditors will request. In my experience
as an auditor, if you are not able to. .>produce these reports, I can promise you
that the audit will not go well.0. .>Alright, so now let&#;s talk about some
troubleshooting tips for reconciling0. .>your bank and credit card accounts in
QuickBooks Online. Try some of these tips. .>if you&#;re having trouble getting to a
0 difference between what&#;s in. .>QuickBooks and what&#;s on your bank
statement. Tip number one: if possible,. .>narrow the search down to the
transaction type. Figure out if you are. .>out of balance with the withdrawals and
payments, or deposits and credits.. .>Tip number two: if you are out of balance for
deposits and withdrawals, then tackle. .>them separately. In other words balance
withdrawals first and then move on to. .>deposits and credits, or vice versa.
Tip number three: look for the exact dollar. .>amount that you are off. For example,
if your difference is $.0,. .>then look for a transaction for this. .>amount on your bank statement, and then
on both the withdrawals and the payments.0 .>section, and the deposits and credit
section of the reconcile window.. .>Tip number four: triple check the information
that you entered from the bank statement,. .>such as the ending balance and your
statement ending date. If either of these. >are incorrect, that could cause the other
balance as well. Tip number five: check to. .>see if there are any transactions in the
reconcile window that you did not select. .>Remember if the transaction is on your
bank statement, then the radio button in. .>QuickBooks should be marked in the
reconcile window. Tip number six: if you. .>do have a transaction on the bank
statement that is not in QuickBooks, .>then you will need to add it to QuickBooks. To do so just select the finish later. .>button from the drop down to save your work.
If the missing transaction is a .>withdrawal or payment, then you would
enter it as you normally would.. .>We explain this more in our lesson on how
to create a check in QuickBooks which is. .>linked below. If the missing transaction
is a deposit, then enter it as you.0 .>normally would. We explain how to record
deposits in QuickBooks in another. .>lesson linked below. Tip number seven:
take a break. If you&#;ve been at it for a. .>while and you need a break, select the
finish later option to save the work. .0>that you have done so that you can
easily pick up where you left off.. .>Sometimes taking a breather and coming
back can help you spot what&#;s causing. .>the difference quickly. And finally tip
number eight: while it might be tempting,. .>I recommend that you don&#;t click that
reconcile button until you have a. .>difference of 0. The problem will not
go away. The difference will just carry. .>over to the next month until you figure
it out. If you do hit the reconcile. .>button and you&#;ve not figured out the
difference, QuickBooks will record the. .>out of balance in a miscellaneous expense
account called &#;unreconciled. .>discrepancies&#;. Of course if we&#;re talking
about a small amount of $ or.0 .>less, then it might be worth your while
to move on. At the end of the day you get. .0>to determine what amount you are
comfortable with. Reconciling your bank0. .>accounts do not change your financial
statements. However behind the scenes in. .>QuickBooks the items that have been
reconciled, or filed,. .>are in the check register with the
letter R. So let&#;s head over to the check. .>register so we can see that. So we are in
our check register and if you notice in. .0>this column, several transactions have
the letter R and that simply means that. .>you have matched these up with your bank
statement and these have been reconciled..0 .>So one of the things you want to make
sure is that you don&#;t want to make any. .>changes to a reconciled item. This is
primarily due to the fact that you;have. .>balanced it with your bank statement.
You can edit the account information if you. .>need to. So for example if you&#;ve
categorized something as meals and. .>entertainment like this item here, and it
should have been office supplies, then.0 .>you can go ahead and definitely make
that change because it will not change the actual amount. But you want to make
sure that you dont make changes to the date or the amount. If you do it can
cause your financial statements to be inaccurate and you will no longer be in
balance with your bank .That wraps up the lesson on how to reconcile bank accounts in QuickBooks Online.. .>To access our full QuickBooks Online course
or any of the other lessons in this series,0. .>click this link. You can also find a link below this
video for a free 0-day trial of QuickBooks Online.
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