Reconcile Software: What Does it Mean to Reconcile in QuickBooks?

Reconcile is the process that ensures entries in your business’s general ledger are consistent with the corresponding sub ledger. Mystery differences in a business’s financial records can point to serious issues like fraud or theft. Your accounting team must adjust the accounting records correctly. Also, it can detect which you are overlooking early. Every business has its rules and regulations for the frequency of its reconciliation. This method can occur daily, monthly, or annually based on the number of transactions compared. Most business owners reconcile their bank statements with the help of the QuickBooks software. However, they are unaware of what it means to reconcile in QuickBooks.

Reconciling accounts can be a tiresome and time-consuming method. That is why many businesses depend on accounting software to operate and consolidate their strategic processes. 

In this article, we will investigate how to reconcile in QuickBooks Desktop. Also, we will learn what it means to reconcile in QuickBooks.

Explaining Reconciliation Between Two Bank Accounts

When you reconcile, you compare two relevant accounts to ensure everything is correct and equal. Like adjusting your checkbook, you are required to do this review in QuickBooks. You must negotiate your bank and credit card accounts in QuickBooks frequently to ensure they equal your printed bank accounts. It can help to know what does it means to reconcile in QuickBooks.

How the Reconcile Method Works?

When you reconcile, you compare your bank reports to what is in QuickBooks for a particular period. Your operation is to ensure everything is equal. Ultimately, the difference between QuickBooks and your bank accounts must be US $0.00. However, processing payments can sometimes lead to a small gap. Besides this, it can assist in knowing what does it mean to reconcile in QuickBooks.

When to Reconcile Your Bank Accounts?

It is an excellent concept to reconcile your accounts every month. You will understand more about your business every time, and rest easy learning your information in QuickBooks is 100% correct. Reconciliation also assists you.

• Understanding your company’s net worth accurately
• Detect mistakes
• Have better communication with your accountant. 

What Does It Mean Reconcile in QuickBooks?

Understand how to compare your accounts to equal your bank and credit card reports. You must check your accounts in QuickBooks to ensure they equal your authentic bank and credit card reports, just like adjusting your checkbook. Also, this method is called reconciling. Also, it can assist in understanding what does it mean to reconcile in QuickBooks.

Generally, you should reconcile your checking, credit card, and accounts each month. Once you get your bank statements, reconcile the register of financial transactions with what you input into QuickBooks. If everything is equal, you understand your accounts are adjusted and correct. 

1. Examine Your Opening Balance

Before you start with reconciliation, back up your company file, if you compare an account for the first time, check the opening balance. 

2. Prepare for the comparison:

Generally, ensure you enter all financial transactions for the bank statement period you plan to reconcile. If there are financial transactions that have not cleared your bank yet and are not on your statement, you have to want to input them. 

3. Start Your Reconciliation

Once you have your bank reports, you can start reconciling

If you are comparing many months, start with your oldest bank reports. Reconcile every month individually, one statement at a time. 

Note: If you are reconciling a merchant or Payment account and QuickBooks Desktop watch that you are not signed in, you will observe a sign-in window.  Also, this makes sure your account is successfully connected to a valid corporation identification. 

1. Searching for the Banking menu, then choose Reconcile
2. choose the bank or credit card account you wish to reconcile in the Account section.
3. The Statement Date is filled automatically in. Usually, it is 30 or 31 days after the statement date of the reconciliation. Besides this, adjust it as required to equal your bank statement. 
4. QuickBooks also automatically enters the Beginning Balance. It utilizes the ending balance from your previous reconciliation to obtain this number.
5. Input the Ending Balance depends on your bank statement
6. Input the Service charge and interest earned depending on your bank statements. Do not enter fines you have already entered in QuickBooks.
7. Check the review section. If the details are accurate, choose Continue or OK.

Suppose your starting balance does not equal your statement. Then, some devices can aid you. 

• Choose Locate Discrepancies if the figures do not match. Besides this, this provides statements you can apply to discover discrepancies and other reconciliation problems.
• If you are required to start over from scratch, you can choose Undo Last Reconciliation.

Importance: When you undo a past reconciliation, your starting balance reverts to the beginning balance of your previous reconciliation. Also, all visible financial transactions on the reconciliation become unclear. 

4. Compare Your Bank Statement and QuickBooks

Generally, easily compare the register of financial transactions on your bank statements with what is in QuickBooks. Also, ensure you have the correct dates and transactions. When you are done checking your information, you will understand everything that made it into QuickBooks. 

You equal your transaction:

1. When you are ready, you can begin with the first transaction on your bank statement
2. Search for the exact one in the reconciliation window in QuickBooks.
3. Reconcile the two transactions. If the transaction is equal, press and put a checkmark in the checkmark column. Also, this reconciles the transactions. 
4. Compare every transaction on your statements with what is in QuickBooks as you clear or include transactions in the reconciliation. Besides this, the earned Balance amount decreased.  Besides this, the amount increases if you remove or have deposits and other credit amounts. 

If a transaction does not happen on your record, do not mark it as it is reconciled. 

• Search for the item you have marked cleared to see the overall number and amount of transactions. Besides this, many banks offer the same transaction on bank statements. Also, compare the overall number of transactions to see if anything is missing.
• Press the transaction. If you are required to edit or get more information about a recent transaction, then press GO TO or double-check
• When you are required to step back and modify the information you input, you can start your Reconciliation and choose modification. Also, the assistance charges, interest, and ending balance information are reflected in the part of it. 

5. Check the Reconciliation

After you compare, you can choose Display to check the Reconciliation report or Print to take a print. Your work is completed. 

If you are required to check a reconciliation statement later on

1. Press to the Reports menu, then choose Report Center
2. Examine and open a past reconciliation report
3. Press the account you reconcile, then either details, summary, or both.

Read more: Can AS400 Accounting Software Really Improve Your Process?

End Note!

Reconciliation of your bank reports quickly implies comparing your financial records against the register your bank offers. This method is crucial since it ensures you can detect any unusual transactions caused by fraudulent or accounting mistakes. As a business owner, the practice can also assist you in handling your cash flow and spotting differences. Besides this, many business owners use QuickBooks software to track their financial condition or business operations. However, they are not familiar with what does it mean reconciliation in QuickBooks. If they read this article, they can easily understand how to reconcile in QuickBooks Desktop.