So it’s the 31st. You open QuickBooks and it says there’s $12,340 in the business account. Then you log into the bank, and the bank says $12,295. That’s $45 nobody can explain. Not a disaster, sure, but it’s the kind of thing that nags at you when you’re the one signing off on the books.
That’s what QuickBooks bank reconciliation is for. Once a month you sit down with your statement and check QuickBooks against it, line by line, till both show the same number. Leave it for a few months and those little $45 mysteries tend to breed.
In this guide we’ll cover the prep, how to reconcile in QuickBooks Online click by click, reading the reconciliation report, and what to do when it flat out refuses to balance.
What Is QuickBooks Bank Reconciliation?
QuickBooks bank reconciliation is simply you comparing what’s in QuickBooks with what’s on your bank or credit card statement for the same dates. Everything matches and the difference shows zero? Then you’re reconciled. That’s it.
A lot of people assume bank feeds take care of this. They don’t, not fully. Feeds pull transactions in, but they’ll happily let the same deposit in twice, and they have no clue that the check you mailed on the 28th still hasn’t been cashed.
Why It Matters for Small Businesses
Your P&L and your balance sheet both lean on your cash numbers. If cash is off, so is everything built on top of it. Mistakes are also cheap to fix while they’re a few weeks old. Try untangling a duplicated deposit from last January in December and you’ll see what we mean.
Then there’s fraud, which nobody likes to think about. If you’re looking at every line each month, a strange withdrawal won’t sit there unnoticed for long. Your accountant will be grateful too.
Skip it and you’re basically making calls off a balance that isn’t real, which is one of those common bookkeeping mistakes that quietly eats into cash flow.
Before You Start: What You’ll Need
Sort out a few things first. Your QuickBooks bank reconciliation will go a lot quicker for it.
- The bank statement for the month, since you’ll need its ending balance and end date
- Every transaction for that month already entered and categorized, which means emptying the For Review tab if you use bank feeds
- The date of your last reconciliation, since this one should pick up the day after
- Any bank fees or interest on the statement, in case they’re not in QuickBooks yet
We’ll follow one made-up business through the steps. Maple Street Bakery’s March statement starts at $8,200 and ends at $9,450 on March 31.
If you sell online, there’s a wrinkle. Stripe, Shopify Payments, Amazon and the like usually send one lump deposit that’s really dozens of sales minus fees minus refunds. Matching that against your bank takes a bit more care, so it’s worth reading up on how QuickBooks works for ecommerce first.
How to Reconcile in QuickBooks Online Without the Guesswork
Here’s the QuickBooks Online bank reconciliation process as it looks in most accounts right now.
- Go to Accounting, then Reconcile. Some layouts tuck it under All apps or the gear icon. If you’ve never reconciled before, you’ll see a Get started button.
- Use the account menu at the top to select the bank or card account you’re working on.
- Look at the beginning balance. It has to match the opening balance on your statement. Connected accounts usually fill this in on their own.
- Type in the ending balance and ending date from the statement.
- Click Start reconciling.
- Go down the list and tick every transaction that’s also on your statement. Anything you already matched in bank feeds may come pre-ticked.
- Keep an eye on the Difference box. You want $0.00.
- Hit Finish now, then Done.
At Maple Street Bakery, the owner puts in $9,450 and March 31 and starts ticking. Every line’s checked and the difference is still sitting at $15. Annoying. Back to the statement, and there it is, a $15 monthly account fee nobody entered. Add it, the difference drops to zero, and March is done.
Screens change a bit between plans, so if yours doesn’t look like this, Intuit keeps an up-to-date guide on reconciling an account in QuickBooks Online. Oh, and UK or Australian readers, it’s the same process for you. Different currency, and you’ll see cheques where Americans see checks, but that’s about it.
How to Read a QuickBooks Reconciliation Report
Every time you wrap up a QuickBooks bank reconciliation, the software quietly saves a report. Hang on to it. Your accountant will probably want it at year end, since it shows the account balanced on that date.
Need an old one? Open Reconcile and click History by account, then choose the account and the month.
The QuickBooks reconciliation report is split into four parts. Up top there’s a summary with the opening balance, what cleared and the closing balance. Then comes a list of cleared transactions, which is just everything you ticked.
After that you get the uncleared ones, things in QuickBooks the bank hadn’t processed yet, like a check your supplier is still holding onto. Last is any change made after reconciliation. If an old month suddenly won’t balance anymore, start there.
Watch for uncleared items that are three, four, six months old. Those are almost always duplicates or voided payments someone forgot to delete. It’s also smart to read this report next to your other QuickBooks bookkeeping reports each month.
How to Fix a QuickBooks Reconciliation Discrepancy
The difference won’t go to zero. Everyone hits this sooner or later, and it’s usually one of these.
- A typo in the ending balance or date, which you can fix with Edit info
- Something missing, often a bank fee, interest or a transfer between accounts.
- A duplicate, typically a deposit you entered by hand that also came in through the feed.
- A wrong amount, like $1,250 typed as $1,520. Happens all the time. Little trick here, if the difference divides evenly by 9 you’re probably looking at two digits that got swapped.
- A past month that got edited. Edit or remove anything from an already reconciled month, and next month’s opening balance moves with it.
A Quick Way to Track It Down
First, recheck the ending balance and date. Seriously, do this first. Then compare the total deposits and payments you’ve cleared against the totals on the statement, because whichever side is off tells you where to dig.
Next, look for a single entry matching the difference, or one worth exactly half of it. Half usually means something went in as money in when it was money out. If the beginning balance is the problem, open last month’s report and check the changes made after reconciliation.
QuickBooks will let you finish anyway and post an adjusting entry for the difference. Try not to. It buries the problem without fixing it, and Intuit itself says to check with your accountant before you do.
Been staring at the same $15 for an hour? Or it’s spread across several months now? That’s usually the point to hand it off. Our QuickBooks bookkeeping services cover monthly reconciliation and cleanups just like this one.
Best Practices and How Often to Reconcile
How often? Once a month works for most small businesses, ideally the same week the statement shows up. Got loads of card transactions every day? Then do your QuickBooks bank reconciliation weekly so each round stays small.
A few habits that help:
- Reconcile everything, credit cards, savings and loan accounts included, not just checking
- Go in order, January before February, otherwise mistakes get really hard to trace
- Don’t touch reconciled months unless you really have to
- Clear bank feeds once a week so nothing piles up
- Save a PDF of each reconciliation report with your records
Fallen a few months behind? Happens more than you’d think. Pick the oldest month that never got reconciled and work forward from there, one statement at a time, until you can reconcile a bank account in QuickBooks right up to this month. If it’s a big pile, catch-up bookkeeping will get you there faster, and you’ll be able to prepare for tax season without panicking.
Final Thoughts
Look, nobody gets into business because they love reconciling bank accounts. Still, QuickBooks bank reconciliation is the thing that lets you trust every other number in your books. Statement, tick, zero, save the report. If it won’t balance, go through the usual suspects before you go anywhere near an adjusting entry. Once it’s a monthly habit, it really does take minutes.
Short on time or stuck on a stubborn discrepancy? Accountsly’s QuickBooks bookkeepers can take reconciliation off your plate and keep your books accurate month after month. Book a discovery call to see how we can help.
Frequently Asked Questions
How frequently should QuickBooks bank reconciliation be done?
Once a month, right after your statement arrives. High-volume businesses often do it weekly.
Is reconciliation still needed when bank feeds are turned on?
Yes. Bank feeds only import transactions. Reconciliation confirms they’re correct and recorded once.
Can I undo a reconciliation in QuickBooks Online?
You can unreconcile single transactions from the account register. Undoing a full reconciliation needs an accountant user.
Why is my QuickBooks beginning balance different from my statement?
Usually a transaction from a reconciled month was edited or deleted. Last month’s reconciliation report will show the change.
What happens if I never reconcile my accounts?
Errors pile up unnoticed and your reports stop being reliable. Fixing a year of books later takes far longer.
