To reconcile in QuickBooks Desktop, open Banking, then Reconcile, choose the account, confirm the statement date and beginning balance, and type in the statement's ending balance. Then check off each deposit and payment that appears on the statement until the difference reads 0.00, and select Reconcile Now. Keep the reports it offers.
Opening the QuickBooks Desktop reconcile window
The reconcile window opens from a small setup screen, and that screen decides everything that follows. Go to Banking, then Reconcile, pick the account, and check the fields against the paper or PDF statement before you press Continue. A wrong value here produces a difference you will chase for an hour.
The fields, in the order they appear:
- Account. The bank or credit card account in your chart of accounts. Pick the one that matches the statement, not a similarly named savings account.
- Statement Date. QuickBooks fills in a date automatically. Replace it with the closing date printed on this statement if they differ.
- Beginning Balance. QuickBooks takes this from the ending balance of your last reconciliation. It should equal the opening balance on the statement. If it does not, stop and read the section on a beginning balance that does not match.
- Ending Balance. Type the closing balance from the statement.
- Service Charge and Interest Earned. Enter any bank fee or interest shown on the statement that you have not yet recorded, with its date and account. QuickBooks posts them when you finish.
Intuit documents this setup screen in its help article, Reconcile an account in QuickBooks Desktop. Select Continue and the reconcile window opens.
Two optional settings worth knowing
The window has an option to hide transactions dated after the statement's end date. Turn it on. Without it, a check you wrote on the 3rd of next month sits in the list beside this month's items and is easy to tick by mistake.
Credit card accounts split the list in two: charges and cash advances in one section, payments and credits in the other. You work through each section on its own. The card-specific steps, including how the payment to the card issuer is recorded, are in a separate guide on how to reconcile credit card in QuickBooks.
Matching cleared items in QuickBooks Desktop
Matching means placing a checkmark beside each QuickBooks transaction that also appears on the statement, which tells QuickBooks the bank has processed it. Work down the statement line by line, not down the QuickBooks list, so that every statement line gets a decision and none is skipped.
For each line on the statement:
- Find the same amount in the Checks and Payments list or the Deposits and Other Credits list.
- Check the box in the checkmark column.
- Watch the Cleared Balance at the bottom: it falls as you clear payments and rises as you clear deposits.
Deposits, checks and the totals box
A deposit that QuickBooks shows as one line may be several customer payments grouped on one deposit slip. The bank shows one credit for the total, and QuickBooks shows one grouped deposit if you used the Make Deposits screen. If you recorded each payment separately and never grouped them, you will see several QuickBooks lines against a single bank credit. Tick all of them and compare the total.
The area labelled Items you have marked cleared shows a count and a total for deposits and for payments. Compare both pairs of numbers to the summary on the statement, which usually states how many deposits and how many withdrawals there were and what they came to. If the counts agree and the totals agree, the difference will be zero. If one count is off by one, you have found the line to look for.
What not to tick
Do not tick a transaction that is not on the statement. Outstanding checks, which you wrote but the bank has not yet paid, and deposits in transit stay unchecked. They are legitimate reconciling items, and they will show up on the report as uncleared. If you are new to that idea, the concept is explained in the guide to how to reconcile bank statements.
A transaction on the statement that is missing from QuickBooks needs to be entered first. Select a line and use Go To, or double-click it, to edit an existing transaction. To add a missing one, record it in the register, then return to the reconcile window and tick it.
When the difference is not zero
If the difference is 0.00, select Reconcile Now. If it is not, QuickBooks opens a window with three choices:
| Choice | What it does | When to use it |
|---|---|---|
| Return to Reconcile | Takes you back to the window | You spot a line you missed |
| Leave Reconcile | Saves your ticks so you can finish later | You need to edit or look up transactions |
| Enter Adjustment | Posts a journal entry to an expense account called Reconciliation Discrepancies | Only when every real transaction is in QuickBooks and the remaining difference cannot be traced |
Treat Enter Adjustment as the last resort. It makes the screen balance without explaining the difference. Intuit's own guidance, in the article cited above, says to use it only when all correct transactions are in QuickBooks and your entries are accurate.
What do the QuickBooks Desktop summary and detail reports show?
When a reconciliation finishes, QuickBooks offers a Summary report, a Detail report, or both. The summary is one page of totals. The detail lists every transaction that was cleared and every one that remained uncleared at the statement date. Keep the detail report; the summary alone proves very little.
Each report is built from the same figures:
| Section | What it shows |
|---|---|
| Beginning balance | The balance carried forward from the last reconciliation |
| Cleared transactions | Checks and payments cleared, then deposits and credits cleared, each with a total |
| Cleared balance | Beginning balance, less cleared payments, plus cleared deposits |
| Register balance as of the statement date | The cleared balance plus or minus items still uncleared |
| Uncleared transactions | Outstanding checks and deposits in transit up to the statement date |
| New transactions | Items dated after the statement date that are already in the books |
An annotated detail report
The figures below are an example, not real data. They show how to read a detail report for a month with one outstanding check.
| Line | Example amount | How to read it |
|---|---|---|
| Beginning balance | 12,400.00 | Must equal last month's ending balance and this statement's opening balance |
| Cleared checks and payments (14 items) | -8,215.40 | Compare the count and total to the statement's withdrawals |
| Cleared deposits and credits (6 items) | 9,860.00 | Compare to the statement's deposits |
| Cleared balance | 14,044.60 | 12,400.00 minus 8,215.40 plus 9,860.00; must equal the statement ending balance |
| Uncleared checks (1 item) | -640.00 | The outstanding check; confirm it clears next month |
| Register balance at statement date | 13,404.60 | Cleared balance less the outstanding check |
Read the report from top to bottom as a proof. The cleared balance must equal the bank's ending balance, and the register balance must equal what the general ledger shows for that account on the statement date. If both agree, the file supports the reconciliation. If you want to see how a finished report is laid out for workpapers, the reconciliation report sample shows the parts an auditor looks for.
Finding the report again later
You do not need to print it on the day. Go to Reports, then Reports Center, and open the Previous Reconciliation report, choose the account, and pick Summary, Detail or Both. You can also ask it to include the transactions cleared plus any changes made to them since the reconciliation. Intuit describes these steps in the same help article. Save the PDF to the client folder each month anyway. Intuit's beginning balance article says QuickBooks Pro users can open only the last reconciliation report, so older months exist only as the copies you saved.
QuickBooks Desktop beginning balance that does not match
The beginning balance is the figure QuickBooks carries forward from the last reconciliation, and it should equal the opening balance on the statement. When it does not, something that was cleared in the past has changed, or the account never started cleanly. Do not reconcile until you find which one.
Intuit's article Fix beginning balance issues in QuickBooks Desktop lists the causes:
- No opening balance, or the wrong one. The account was set up without a starting balance, so the first reconciliation starts at zero.
- A cleared transaction was later voided, deleted or changed. The cleared total moves, and so does the beginning balance of the next reconciliation.
- A file converted from another QuickBooks version, or a damaged company file.
Finding the transaction that moved
Run Reports, then Banking, then Reconciliation Discrepancy. It lists transactions changed since the last reconciliation, including when the change was made. The Audit Trail report under Accountant and Taxes and the Previous Reconciliation report give a second view. The way to trace edited lines on the other product is described in the guide to which changed transactions caused the QuickBooks discrepancy, and the same thinking applies on Desktop.
The first reconciliation of an account
If this is the first time you reconcile an account that has an opening balance but no history, the fix is a journal entry. Intuit's steps: go to Company, then Make General Journal Entries, date it on the statement date, use the bank account with the opening balance in Debit, and offset it to Opening Balance Equity. In the reconcile window, tick that entry under Deposits and Other Credits. Check with your accountant before posting an opening balance to a live file.
Choosing the repair
Once you know the cause, you have two honest options. Correct the changed transaction so it matches what was originally cleared, or undo the reconciliation and redo it. A force adjustment hides the problem and leaves a journal entry that the next person must explain.
How do you undo a QuickBooks Desktop reconciliation?
Go to Banking, then Reconcile, select Undo Last Reconciliation, and follow the prompts. The command reverses only the most recent reconciliation for that account: the beginning balance returns to the previous reconciliation's figure, and every item cleared in it becomes uncleared. Back up the company file first.
The reconcile article states both effects, and the beginning balance article adds that you close and reopen the Reconcile window afterwards.
The limits of undo
Undo works one reconciliation at a time, newest first. If the error sits three months back, you must undo three reconciliations in sequence, fix the problem, then redo all three in date order. That is the main cost of finding a problem late.
Neither Intuit article says what happens to the service charge, interest or adjustment entries posted during the reconciliation you undo. Check the register for them before you redo the month, so a fee is not recorded twice. To find an adjustment posted through Enter Adjustment, use Edit, then Find, on the Advanced tab with Memo set to "Balance Adjustment".
A short checklist before you undo
- Back up the company file.
- Save the current reports as PDFs, so you can compare the redo.
- Note the statement date and ending balance you used.
- List any service charge, interest or adjustment entries tied to that reconciliation, and check them after the undo.
- Undo, correct the cause, and reconcile again.
Where a tool can do the first pass
PreciseBankFlow reads the statement itself, checks that opening balance plus deposits less withdrawals equals the closing balance, and flags duplicates and gaps for you to review. It is opening to CPA and audit firms in small groups, and you can request a spot.
For other systems, the same discipline carries across: NetSuite bank reconciliation uses matching rules and a submit step, and Sage 50 and Sage Intacct each have their own screens and reports.