Reconciling an account in QuickBooks Online means matching every transaction in your books against the bank or credit card statement for the same period, until the Difference field reads $0.00. The tool lives under Reconcile in the Accounting menu. It is one of the few bookkeeping jobs with a hard finish line.
What reconciling actually checks
The bank statement is an outside record of the same money your QuickBooks file tracks, and reconciling makes you account for every gap between the two.
Most gaps are boring. A transaction the bank feed never pulled in, one that got entered twice, an amount keyed wrong, or a check you recorded that the payee has not cashed yet. Once in a while it is a charge nobody recognizes, and a monthly reconciliation is often where an owner first sees it.
Any account that gets a statement should be reconciled. That covers each checking and savings account and each business credit card, and loans and lines of credit are worth doing too.
Before you open the reconcile screen
Have the statement in front of you, for most people that is the PDF from the bank. You need two numbers off it, the ending date and the ending balance.
Review and categorize the bank feed for that month first. Only transactions that are actually in QuickBooks show up on the reconcile screen, so anything still sitting in the For review list will not be there to check off.
Go in order. If March is not reconciled, don't start April. QuickBooks shows the last statement ending date for each account, and the statement you are working on should pick up the day after it.
Step by step in QuickBooks Online
- Go to All apps, then Accounting, then Reconcile. The first time you reconcile an account you will see a Get started button instead. Intuit moves menus around now and then, so if yours looks different, search for Reconcile.
- Pick the account from the Account dropdown and compare the last statement ending date with your statement.
- Enter the ending balance and ending date exactly as the statement prints them. Then check the beginning balance QuickBooks shows against the opening balance on the statement. If they don't match, stop and skip to the beginning balance section below.
- Go down the statement line by line and tick the matching transaction in QuickBooks. The cleared balance moves as you go.
- Difference at $0.00, select Finish now, then Done. QuickBooks saves a reconciliation report for the period, which you can pull up later under History by account on the Reconcile page.
When the difference will not reach zero
Intuit lists three usual causes: the ending balance was typed in wrong, something was checked off in QuickBooks that has not cleared the bank yet, or there are missing or duplicate transactions.
Check the typo first, it takes seconds. After that, compare the two sides line by line rather than eyeballing totals. Two old bookkeeping tricks are worth knowing. If the difference is exactly twice the amount of one transaction, that transaction was probably entered in the wrong direction, a deposit recorded as a payment or the other way around. If the difference divides evenly by 9, look for two digits swapped somewhere.
Don't edit the ending balance to make it tie. That just carries the problem into next month.
When the beginning balance is off
A beginning balance that doesn't match the statement means something changed in a period you already reconciled. Intuit names the common causes:
- a wrong opening balance when the account was first set up in QuickBooks
- a reconciled transaction that was later edited, deleted, voided or unreconciled
- a bank feed transaction that got undone and sent back to review
- something dated before the last reconciliation that was marked reconciled by hand
QuickBooks has a reconcile discrepancy report for exactly this, listing what changed in past reconciled periods and how each change moved the balance. The audit log under Settings shows who changed what, and when.
Falling behind makes all of this harder. One of our Orlando clients, a commercial painting contractor, came to us two years behind on reconciliations, with personal and business spending mixed in the same accounts and a state payroll audit on the way. We rebuilt 24 months of books. The business passed the audit with zero penalties, and the cleanup turned up $14,500 in tax deductions that had been missed. If you are a few months behind yourself, our guide on how to catch up on behind bookkeeping walks through the order to do it in.
How often to reconcile
Monthly, for every account, as soon as the statement arrives, while you still remember what the odd charges were.
Keep the saved reconciliation reports. They show the books tie to the bank, and they belong in the packet your accountant gets at tax time, along with the rest of our small-business tax prep checklist. Not reconciling monthly also made our list of common small-business bookkeeping mistakes.
If your file is months behind, or the beginning balance has drifted and you can't find why, our QuickBooks cleanup service starts with this exact work.