How to reconcile in QuickBooks Online step by step

Before you open the reconcile screen

Have the bank statement for the month in front of you, as PDF or paper. You need three numbers from it: the statement ending date, the beginning balance and the ending balance. Then make sure the month is complete in QuickBooks. Review and categorize everything waiting in the banking feed for the statement period, record any checks you wrote by hand and enter deposits you made but have not recorded yet.

A good habit is to reconcile in order. If last month was never reconciled, start there. QuickBooks carries the ending balance of the last reconciliation forward as the next beginning balance, so a skipped month makes every later month harder.

Step 1. Open Reconcile

Go to the gear icon or the Accounting menu and choose Reconcile. Select the bank or credit card account that matches the statement.

Step 2. Enter the statement details

Check that the beginning balance shown by QuickBooks equals the beginning balance on your statement. Enter the ending balance and the ending date exactly as printed. If the statement shows service charges or interest that are not yet in QuickBooks, you can enter them here, or record them as separate transactions first, which keeps the audit trail cleaner.

Step 3. Tick what cleared

QuickBooks lists payments and deposits up to the ending date. Tick every item that appears on the statement. Work down the statement line by line instead of down the QuickBooks list, so you never tick an item the bank has not processed. Use the filter to show only payments or only deposits when the list is long.

Step 4. Watch the difference

The difference in the top right corner is the gap between the statement ending balance and the cleared balance in QuickBooks. When every cleared item is ticked and the books are complete, it reads 0.00.

Step 5. Finish and save the report

Choose Finish now. QuickBooks offers the reconciliation report, which lists the cleared items and the items still open at the ending date. Save it as PDF with the statement in your month end folder.

When the difference is not zero

• An item is ticked that is not on the statement, or an item on the statement is not ticked. Compare counts and totals of deposits and payments with the statement summary.
• A transaction is missing in QuickBooks. Bank fees, interest and automatic payments are the usual suspects.
• A transaction was entered twice, often once from the bank feed and once by hand.
• An amount was transposed, for example 54.10 entered as 45.10. A difference divisible by 9 often points to a transposition.
• A previously reconciled transaction was edited or deleted, which changes the beginning balance.

Resist the temptation to finish with a difference. QuickBooks lets you, but it creates an adjustment that hides the real cause and comes back at year end.

When the bank feed is not enough

The reconcile screen only compares the statement with what is already in QuickBooks. When the feed has gaps, when the bank only sends PDF statements, or when you are catching up on months of history, it is faster to find the missing and duplicate lines first. Export Transaction Detail by Account for the bank account to Excel and run it against the statement in BankReconciler. You get the list of lines missing in QuickBooks, the duplicates and the outstanding items, and then the QuickBooks reconcile screen takes minutes. Our bank reconciliation QuickBooks page shows the export step by step.

After you finish

• Keep the statement and the reconciliation report together for each month.
• Look at the list of uncleared items. Checks older than a few months need follow up, see outstanding checks bank reconciliation rules.
• If you made a mistake, you can reverse it, see QuickBooks Online reverse reconciliation.