How to Reconcile Accounts on QuickBooks
Question: I reconcile my bank account by hand. Do I need to do it in QuickBooks, too?
Answer: QuickBooks does have a reconcile function on all its products. It lists all the items that you posted as bank items, and then asks you to compare these to your actual bank statements.
The QB Reconcile function is intended to catch and correct errors like incorrect amounts, omitted items, double-entered items and so on. Every item on the bank statement is to be checked as reconciled in your QB bank register.
Reconciliations are important for catching errors, and also important should you be audited, seek a loan or want to sell your business. The reconciliation opening and closing balances should match those on your bank statements, which can be verified by outsiders (e.g., auditors, lenders or prospective buyers).
If your bank account is used strictly for business (as it should be), accurate reconciliations, which can be compared against the bank statements, show clearly that all cash in and out of our business has been accounted for in QuickBooks. Having your bank account reconciled in QuickBooks is a proof your books are accurate.
Premier and Enterprise also have a reconciliation report that shows the items included in each month’s reconciliation, and they are saved for future use and reference.
Please email accounting questions you would like considered for the column to HGatter@AccountingSupportLLC.com with the subject line of "Ask the Accountant."
Harriet Gatter, owner of Accounting Support LLC, was an ad specialty distributor for 23 years and an adjunct professor of accounting at Neumann University. She sold her ad specialty business in 2012, became certified as a QuickBooks ProAdvisor, and now works exclusively with ad specialty distributors nationwide on their QuickBooks, order management and accounting needs.