Account reconciliation services are a vital accounting process that checks that two different financial records match up. Keeping your accounts in order is especially important.
It's easy for small mistakes to pile up and cause inconsistencies in your business when dealing with lots of transactions and numbers.
Knowing how Quickbooks Online reconciles when managing a business' accounting is necessary. It's pretty much the most widely used online accounting tool. This article covers account reconciliation services on Quickbooks and will guide you through the process.
Let's get going!
Reconciliation: What is it?
If you work in business management or accounting, you are likely familiar with the concept of reconciliation.
The accounting process is common, and you probably don't fully understand it or prioritize it. It's usually done at the end of the fiscal year and ensures that the amount of money spent overlaps what's leftover in your accounts.
It doesn't matter how small the error is - it could lead to significant issues in your company's financial reports, delays with invoicing or payments, and future accounting issues.
How to Reconcile on Quickbooks?
Reconciliation on Quickbooks Online is simple and easy so that you can check for any significant discrepancies in your company's finances. How to do it? Here's a step-by-step guide.
Step 1: Get Your Financial Statements
Having your financial statements on hand is a must for reconciling on Quickbooks. Financial statements are mostly sent online these days. Before you start reconciling, make sure all statements are in order.
Step 2: Reconcile on QuickBooks Online
You can start by selecting the gear in the top right-hand corner of Quickbooks Online and then clicking the Reconcile option. Selecting the accounts you want to reconcile, you will need to enter the pertinent information from the financial statement and select the account for reconciliation. This information will be as follows:
- The date range
- The beginning balance
- Balance at the end
Then click, Start reconciling. Reconciling on Quickbooks is efficient because the software can do much of your work.
Step 3: Read Over the Reconciliation Report
Once Quickbooks reconciles, you'll get a hefty report. A summary of the balance, payments, and deposits will appear at the top. Let's take a look at what you need to pay attention to.
You will then see a detailed breakdown of each transaction. The details of each transaction include the transaction date, the clearance date, the type of transaction, the reference number, the account, and the payee. Depending on the type of transaction, there'll be a section for either payment or deposit. You'll see a green symbol on the right if the banking feed matches the transaction.
Step 4: Match Payments
With the bank statement in hand, you can review every transaction and ensure everything matches. Quickbooks lets you check off matching transactions in the farthest right column.
In the top right corner, where it says Difference, you should see 0$ after everything is checked. Just click Finish now, and you are done!
Once the reconciliation report is complete, you can view and save it all. That's how it works in Quickbooks, ensuring you don't miss a single transaction.
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