QuickBooks Bank Statement and Credit Card Statement Reconciliation
Posted by Mariann Goff on Sat, Apr 24, 2010
What would you pay to have your bank account in balance? How about nothing! Back Office Works will teach you to keep your accounts in balance for free!
Balancing your business begins with timely reconciliation of bank statements and credit card statements.
Performing these tasks is a key function of every business and should be done as soon after statements are received as possible.
Why is Bank Reconiliation So Important?
Reconciling the bank statement may reduce costly overdraft fees by identifying transactions such as electronic vendor payments deducted by the bank but not recorded in QuickBooks or monthly processing fees deducted by credit card companies. Reconciling the credit card statement insures that all expenses are being recorded and that all charges on the statement are, in fact, correct.
QuickBooks software makes bank statement and credit card statement reconciliations easy to complete. Just follow these steps:
- Select "Banking" from the menu
- Select "Reconcile" from the drop down menu
- In the "Account Box" the name of the bank account being reconciled should appear
- The statement date is the date of the statement being reconciled
- The beginning balance is the ending balance of a previous reconciliation
- The ending balance is the balance that appears on the bank statement
- Select "Continue"
- In QuickBooks place a checkmark next to all the checks and payments that appear on the statement and in QuickBooks
- Place a checkmark next to all deposits that appear on the statement and in QuickBooks
- If all items on the statement are accounted for in QuickBooks the difference should be zero. If not--that's when the work begins!
Follow the same procedure to reconcile credit card statements placing checkmarks next to charges and payments made that appear both in the QuickBooks file and on the statement.
What if Quickbooks Doesn't Match the Bank Statement?
When discrepancies occur between statements received and the QuickBooks file it is important find the source of the discrepancies and resolve the problems. This may be as simple as recording transactions in QuickBooks that had been overlooked during the month.
If all transactions in the QuickBooks file match to the bank statement and there is still a difference--the beginning balance is the most likely culprit. If a previously cleared transaction has been changed for any reason (check voided for example) the beginning balance changes and throws off the reconciliation.
In my next blog I'll talk about how to properly handle changing or voiding transactions cleared in previously reconciled bank statements.
Contact me with any questions or for one on one training how on best to use your Quickbooks application to balance your business.