Troubleshooting Bank Reconciliations

It’s great when you balance the checkbook or credit card account and everything works smoothly. I hope that’s your experience at least most of the time. However, there are times when the initial attempt to reconcile doesn’t work out.  So, where do you start?

First, are you in the right account? Depending on how you get to the reconciliation window, QuickBooks may simply pick the first account in the list or the account that you currently have open (if you have multiple windows open).

Next, look at the opening balances.  Do they match?  QuickBooks won’t let you enter that number; it’s actually a calculated number based on all the cleared transactions in that account.  So, if that doesn’t match, click on Locate Discrepancies (lower left-hand corner of reconciliation window) and look at the report.  Chances are you’ll find a transaction that was changed – could have been deleted, re-entered, dollar amount changed, etc.  If you’re able to resolve the issue, then click on Restart Reconciliation. If not, you might want to click on Undo Previous Reconciliation and check that one.

Does your ending balance match? Can’t tell you how often I’ve accidentally typed in a wrong number!

If the difference still is not 0, look at the totals for Deposits & Credits and Checks & Payments. (Note: service charges are not included with the Checks & Payment total.)

Hopefully only one of the numbers is off.  Regardless, your next step is then to review the transactions that you cleared with those on the bank statement.  Sometimes you miss one.  You can change the sort by any column, so you might sort by cleared status or check number or dollar amount (I use all 3 of those frequently).

Sometimes a number is keyed into QuickBooks incorrectly (or the bank read the number incorrectly), so that may mean looking at the cents part of the number.  Another tip is that if the difference by which you are off is a multiple of 9, chances are you transposed numbers somewhere (i.e. instead or 97 you have 79).

Do a Find (Edit, Find) and search for a transaction for that dollar amount. You might get lucky and find the transaction.  Sometimes the date is incorrect or it’s in the wrong account and that’s why you didn’t see it.

I love using the “Hide after the statement’s end date” found in the upper right hand corner because it makes the list of transactions smaller and I’m less likely to incorrectly clear a transaction.  However, if you’re still having problems reconciling, remove the checkmark and see if future transactions were accidentally checked.

To reduce problems with reconciling, here are some suggestions:

  • Reconcile monthly. It’s easier to remember the story on a given transaction, you’ll find mistakes sooner and they’ll be easier to fix.
  • Use the QuickBooks Online banking feature.  Then in the reconciliation window, click on the Matched button. Enter the ending date from your bank statement and then all your matched transactions will show as cleared.  You might be done at this point – yeah!!
  • Clear checks before clearing other deductions. The bank statement will have a total dollar amount for the checks and sometimes the number of checks cleared.  If that matches the statement, then if there are problems on the deduction, you know it’s not a check.
  • When creating deposits from credit cards or other types of batched/wired transactions, you might want to change the memo (e.g. AmEx, MC, Visa, CC, Debit). That way, if you have problems reconciling the deposits, you have an idea what type of deposit is the problem.
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