How to Reconcile a Bank Account in QuickBooks Desktop

Before you start

• Back up the company file. Intuit lists a backup as the first thing you need.
• Have the bank or credit card statement in front of you: beginning balance, ending balance and statement end date.
• Enter every transaction from the statement period into QuickBooks first.
• Reconciling for the first time? Check the account's opening balance. Intuit suggests setting it at the start of a bank statement.
• Several months behind? Start with the oldest statement and reconcile one statement at a time.

If you haven't set up regular backups, see how to back up and restore a company file.

Step 1: Start the reconciliation

1. 1Go to Banking > Reconcile.
2. 2In Account, choose the bank or credit card account.
3. 3Check the Statement Date. QuickBooks suggests one about a month after the last reconciliation, so make sure it matches the end date on the statement.
4. 4Check the Beginning Balance. QuickBooks carries it over from the last reconciliation, and it should equal the statement's beginning balance.
5. 5Enter the Ending Balance from the statement.
6. 6Enter any Service Charge or Interest Earned you haven't recorded yet.
7. 7Select Continue to open the Reconcile window.

Never enter a future date as the Statement Date. QuickBooks stamps that date on each transaction you clear, and a future date can make cleared items show as uncleared on reports.

Step 2: Check off what's on the statement

1. 1Select Hide transactions after the statement's end date, so you only see this period.
2. 2Start with the first line on the bank statement. Find the same transaction in the Reconcile window and check it off.
3. 3Work down the statement line by line. Leave anything that isn't on the statement unchecked.
4. 4If you use bank feeds, select Matched and enter the Statement Ending Date. QuickBooks checks off the downloaded transactions it already matched.
5. 5To fix a transaction, select it and choose Go To, or double-click it. To change the ending balance, service charge or interest, select Modify.
6. 6Compare the count and total under Items you've marked cleared with the summary on the statement.
7. 7When the Difference is $0.00, select Reconcile Now.
8. 8Select Display or Print to see the reconciliation report.

Intuit recommends saving every reconciliation report as a PDF or exporting it to Excel. In QuickBooks Desktop Pro, that's the only way to keep more than the latest one.

Step 3: Find what's causing a difference

If the difference isn't $0.00, QuickBooks offers three choices for a bank account. Return to Reconcile takes you back to keep checking. Leave Reconcile saves your progress so you can fix transactions and finish later. Enter Adjustment forces the reconciliation to balance.

Enter Adjustment posts the difference as a journal entry to an expense account called Reconciliation Discrepancies. Intuit says not to use it without your accountant's guidance, because it doesn't fix the transaction that caused the gap.

Common causes Intuit lists

• The wrong ending balance was entered at the start.
• Someone edited or deleted a transaction that was already reconciled.
• A transaction is missing or entered twice.
• Transactions were entered that haven't cleared the bank yet.
• The last reconciliation was adjusted with a journal entry.

Reports that show what changed

• Reconciliation Discrepancy: go to Reports > Banking > Reconciliation Discrepancy, choose the account and select OK. It lists transactions changed since your last reconciliation.
• Missing Checks: go to Reports > Banking > Missing Checks. Look for checks in QuickBooks that aren't on the statement.
• Transaction Detail: go to Reports > Custom Reports > Transaction Detail. Set the end date to your last reconciliation. On the Filters tab, choose the account and set Entered/Last Modified from that date to today.
• Past adjustments: go to Edit > Find, open the Advanced tab, filter on Memo and search for Balance Adjustment. Or open the Reconciliation Discrepancies account from the Chart of Accounts.

Before you change a transaction back, ask the person who changed it why. The Audit Trail report, under Reports > Accountant & Taxes, also helps you find changes made after a reconciliation.

Step 4: View a previous reconciliation

1. 1Go to Reports > Banking > Previous Reconciliation.
2. 2In Account, choose the account you reconciled.
3. 3Under Statement Ending Date, pick the period you want to review.
4. 4Choose Detail or Both as the report type. Intuit recommends the detailed view when you're fixing a reconciliation.
5. 5Choose Transactions cleared at the time of reconciliation for a snapshot. Choose the option that adds changes made since, to see where those transactions stand now.
6. 6Select Display.

Premier, Accountant and Enterprise keep reports for the last 120 reconciliations. Pro shows only the most recent one.

Step 5: Undo the last reconciliation

1. 1Back up the company file.
2. 2Go to Banking > Reconcile and choose the account.
3. 3In the Begin Reconciliation window, select Undo Last Reconciliation.
4. 4When QuickBooks reminds you to back up, select Continue. Select OK when it says the undo is complete.
5. 5Check that the last reconciled date has moved back to the statement before.
6. 6Close Reconcile, open it again, and reconcile that statement again.

Undoing a reconciliation unclears every transaction on it, and the beginning balance goes back to the one before. To go back further, repeat Undo Last Reconciliation until you reach the statement that went wrong. Then reconcile each statement again, in date order.

Edge cases

• Redoing a statement because its date was wrong: after the undo, delete the service charges, interest and balance adjustments that reconciliation recorded, then reconcile with the right date.
• Credit card accounts: the Reconcile window splits into Charges and Cash Advances, and Payments and Credits. At the end, QuickBooks offers to write a check or enter a bill for the balance. Select Cancel to skip it.
• Zero beginning balance on a first reconciliation: Intuit's fix is a journal entry dated to the statement. It debits the bank account and credits Opening Balance Equity, and you then reconcile that entry. Agree it with your accountant first.
• Adding or changing transactions in a period you already reconciled: Intuit says you may need a mini-reconciliation and suggests asking your accountant.
• Merchant or payments accounts: QuickBooks may ask you to sign in before you can reconcile.

Where QuickBooks Desktop leaves the work to you

• Someone has to compare each line with the statement, every month, for each account.
• The discrepancy reports show what changed, not why. Someone has to track down the person who changed it.
• Undo goes back one statement at a time, and every statement you undo has to be reconciled again.
• In Pro, only the latest reconciliation report stays in QuickBooks. Saving the rest as PDFs is up to you.

Undeposited Funds holds customer payments until you deposit them. Payments still there won't be in the bank account to check off. See how to clear Undeposited Funds and fix deposits.

How Logistify helps

Logistify doesn't reconcile accounts or record bank deposits. The Accounts Receivable Service matches customer payments in the bank file to the open invoices they pay and records them in QuickBooks Desktop as Receive Payments. Unclear payments, short payments and overpayments wait for your team.

We explain that approach in AI cash application for QuickBooks Desktop Enterprise.