Bank Reconciliation with QuickBooks helps you to easily organize your data. To understand the cash flow of a business it is necessary to know the importance of bank reconciliation. This article will provide you the complete knowledge about Bank Reconciliation through QuickBooks.
QuickBooks Bank Reconciliation
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 statements to what you have recorded in QuickBooks. Reconciling your bank accounts regularly will make sure:
- Any reconciliation discrepancies between your records and the banks are resolved in a timely manner.
- Timely notification of any fraudulent transactions.
It is extremely suggested that you reconcile your bank/credit card accounts in QuickBooks on a daily basis to make sure that the precision of your accounting records.
If you need any type of help regarding accounting, bookkeeping, QB setup & consulting or tax & financial planning; hire an Intuit certified ProAdvisor. Dial our QuickBooks payroll support phone number+1-855-441-4417 to get in touch with them.
Importance of Bank Reconciliations in QuickBooks
- All transactions on the bank statement get recorded in QuickBooks
- All of the reconciled transactions are marked in QuickBooks as cleared.
- 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 (uncleared)
- Your financial statement such as the profit & loss statement and the balance sheet is advanced.
- All of the reconciled transactions are obvious in QuickBooks as emptied.
- You are capable to run bank reconciliation address that will give the details of the items that have emptied the bank and those that stay outstanding.
- All transactions of the bank statement get listed in QuickBooks.
Before you pursue the steps to reconciliation, be ensure that you have your bank statement available for the bank account that you wish to reconcile.
- Arrange the bank or credit card account in QuickBooks with the accurate beginning balance.
- Back up the QuickBooks company file.
- A pencil for designating the selected items on your statement may also be nearby. Taken a copy of your bank or credit card statement.
- Filed all uncleared transactions for the statement period.
Reconcile your accounts in QuickBooks
Reconciling accounts can be intimidating. This video will help make the task more reasonable. Check out this link to learn in detail: How do I do QuickBooks Online bank reconciliation in QuickBooks?
Why is it important to reconcile your Bank statements or Bank accounts
The Bank Reconciliation is an accounting method that uses two sets of records to make sure the figures are authentic and in concurrence.
It is an essential process used to conclude whether the money moves an account event and the amount spent. Make secure the two values equalized at the end of the recording period.
The Reconciling a bank or credit card assertion clearly means to examine in contrast your accounting records and accounts receivable and accounts payable and identical them up to the equivalent transaction as recorded on your bank statement.
At the end of each fiscal month and quarter, it’s a fine idea to reconcile an account. When reconciling an account, businesses and singular person prove that each transaction sums to the correct ending account balance.
Mainly, there are two ways to reconcile an account: reviewing documents and reviewing analytics.
Why it’s valuable to Reconcile
It is important to reconcile your account because a daily review of your accounts can help you recognize problems before they get out of hand.
This is particularly valuable for businesses, accounts, and individuals to examine deceptive activity and to continuing financial statement errors.
One of the predominant things to look for is any sign of fraud.
- Were authentic analysis that your problem makes a copy or change, resulting in more money leaving your analysis account?
- Were checks problems without an authorization?
- Are there unapproved transfers out of the account, or has anybody made unapproved withdrawals?
Reconciling your account also helps you identify problems that might require attention. For example, you might want to reevaluate how you handle cash flow and accounts receivable, or you might want to change your act of one that records system and the accounting processes you use.
- Know how much you really have available in your accounts.
- Prevent bank fees for not enough funds or going into lines of credit when you don’t really want to.
- Prevent bouncing analysis or making failed to computerized payments to colleagues and suppliers.
- Know if customer payments bounced or unsuccessful and if any action wanted.
- Keep track of your outstanding checks.
- Ensure that entirety is going into your accounting system correctly.
- Catch bank errors.
When to Reconcile
It’s reasonable to review your accounts at least monthly. For high-volume businesses or positions where fraud is a risk, more often is better. Some businesses reconcile their bank accounts daily.
You can also build care into your bank accounts – ask your bank for ideas. One solution is Positive Pay, which many banks offer, continuing your bank from accept payments unless you have previously notified them of the payment.
If the Accounts don’t get reconcile
Sometimes, it is possible that you would not be able to reconcile the accounts. No need to worry if the difference between the two statements is small. As the majority of the reconciliation module allows you to label it as an error. Most probably, you will be able to fix the missing transaction during next months reconciliation.
Important notes for QuickBooks Bank Reconciliation
The workflow of QuickBooks bank Reconciliation
Just like balancing your checkbook, you need to review your accounts in QuickBooks to make sure they match your real-life bank and credit card statements. This process is called reconciling.
Steps to Start a Reconciliation
This is a short summary of the workflow of QuickBooks reconciliation
Check the account’s opening balance
While creating a new account in QuickBooks for tracking a bank or credit card account, you must enter an initial balance. First time when you reconcile the account, check the initial balance, and make sure it is accurate.
Reconcile the account
Once you receive your monthly bank statements, you can begin reconciling your accounts. You will analyze each transaction in QuickBooks to what is registered on your bank statement. At the end of the reconciliation, the account difference between QuickBooks and your bank statement must be $ 0.00.
Fix a reconciliation
Sometimes things get missed—it’s bound to happen every once in a while. If you find a mistake in a reconciliation, here are the next steps to fix it. You need to review every part of your reconciliation in this particular procedure.
The further steps can be complicated. If you are fresh to perform reconciliations or seeking technical more help, contact your accountant. This can get complex and help you to manage the next steps.
Reconciling an account for the first time
If this is your first time reconciling an account, examine the opening balance in QuickBooks. Be sure it meets your real-life account balance for the day you have chosen.
Reconciling an account you’ve reconciled before
If you have reconciled an account earlier, then re-examine the initial balance in QuickBooks. The opening balance in QuickBooks must match the starting balance and date on your bank statement
Fixing issues during a reconciliation
If you have already examined your initials and initial balances then you need to pay attention to the finished balances in QuickBooks. At the end of reconciliation, make sure the difference between the ending balance in QuickBooks and your bank statement must be $ 0.00
Edit completed reconciliations
If you want to do changes after you reconcile then begin by analyzing a prior reconciliation report. If you reconciled a transaction on accident or it’s an error, you can unreconciled individual transactions. If you have adjusted a reconciliation or want to undo the whole thing, reach out to your accountant. These types of changes can complicate and suddenly unbalance your accounts. Your accountant helps you with suitable actions.
Hope, you have found this information useful. For further support and assistance, get in touch with our Intuit certified ProAdvisor team by dialing our toll-free+1-855-441-4417, we are 24*7 available in the assistance of our customers. Thanks for visiting WizXpert.