QuickBooks reconciliation discrepancies and bank reconciliation problems found with software

What causes QuickBooks reconciliation discrepancies?

Six things cause nearly every discrepancy we see in QuickBooks Online and QuickBooks Desktop files. Two of them break the beginning balance, which means the problem sits in a month you already closed. The other four live in the current month.

• A reconciled transaction was edited. Someone changed the amount or the account on a payment that was already reconciled. The beginning balance of the next reconciliation shifts by the size of the change.
• A reconciled transaction was deleted or voided. Same effect, for the full amount. This happens a lot when a duplicate is cleaned up and the wrong copy gets deleted.
• A bank feed line was added twice. A feed reconnect can pull the same days again, and accepting both copies doubles the transaction.
• A transaction is missing. The feed disconnected for a week, or a check was never entered. The statement has it, QuickBooks does not.
• An amount was typed wrong. 1,450 entered as 1,540. The difference is 90, and that number tells you a lot (see the next section).
• The reconcile screen was filled in wrong. A wrong ending balance, the wrong statement date, or a transaction ticked that belongs to next month.

Read the size of the difference before you search

The amount QuickBooks shows as the difference is a clue. Before you scroll through 300 lines, check it against these patterns. They are old bookkeeping rules, and they still find the error faster than anything else you can do by hand.

When the beginning balance is off, stop and fix that first. QuickBooks Online shows a warning when the opening balance no longer matches the last reconciliation and lists the reconciled transactions that changed. In QuickBooks Desktop the same list is the Previous Reconciliation Discrepancy report under Reports, Banking. If you need to reopen a bad month, our guide to undoing a reconciliation in QuickBooks Online walks through it.

QuickBooks bank reconciliation problems the reconcile screen does not show

The reconcile screen only tells you the totals disagree. It has no idea what is on your statement, so it cannot tell you which line is missing or which one is there twice. You find out by putting the statement next to the screen and ticking, line by line. On a checking account with 200 transactions that is an hour or two, and if two errors cancel each other out you can tick everything and still be wrong.

Three problems are especially hard to see by eye:

1. Duplicates with different descriptions. A payment entered by hand as "Smith Plumbing" and accepted again from the feed as "ACH SMITHPLUMB 4471" looks like two different transactions.
2. Batched deposits. The bank shows one deposit of 4,180.00. QuickBooks shows three received payments that were never grouped into a deposit. Nothing matches one to one, so it looks like four errors. This is exactly what matching bank deposits to invoices solves.
3. Timing that crosses month end. A check written on the 30th clears on the 3rd. Ticking it in the wrong month moves the difference into the next reconciliation.

If the bank feed missed a stretch of days and you only have the PDF statement for that period, you can turn the PDF statement into a QBO file and import the missing transactions instead of typing them in one by one.

Find the discrepancy with reconciliation software

BankReconciler does the line by line comparison for you. It does not need access to your QuickBooks company or your bank. You give it two files and it hands back the lines that do not agree.

1. Download the statement for the month you are stuck on, as PDF, CSV, OFX, QBO or any format your bank offers.
2. Export the QuickBooks register for the same account. Transaction Detail by Account, filtered to the bank account and the statement dates, exported to Excel or CSV, works in both QuickBooks Online and Desktop.
3. Upload both. The statement's opening balance, movements and closing balance are checked to add up first, so a misread or incomplete statement shows up before matching starts.
4. Read the exceptions. Six matching passes pair what agrees: exact amounts, references and check numbers, a date window, one deposit against several payments. What is left is the discrepancy, sorted into lines missing from QuickBooks, lines in QuickBooks that are not on the statement, duplicates, and near matches where the amount differs slightly (your typo).

Then you fix the actual entries in QuickBooks, finish the reconcile screen with a zero difference, and keep the PDF and XLSX report as backup for the month. More on the workflow on bank reconciliation for QuickBooks.

When is an adjusting entry acceptable?

QuickBooks lets you finish a reconciliation that does not balance by posting the difference as an adjustment. In QuickBooks Online it lands in an expense account called Reconciliation Discrepancies. That is fine for a few cents of rounding you have already searched for. It is a bad idea for anything you cannot explain, for three reasons: the real error stays in the books, it can repeat next month, and your CPA will ask about that account when preparing the return. A small business paying for an extra hour of CPA time over a $40 plug has lost money on the shortcut.

Fix it yourself, hire a ProAdvisor, or use software?

If the discrepancy has been rolling forward for months, treat it as a catch up project rather than a single fix. Start from the last month that was right and work forward, which is what catch up bank reconciliation is built for.

Questions about QuickBooks reconciliation discrepancies

How do I fix a reconciliation discrepancy in QuickBooks?

First check whether the beginning balance still equals last month's ending balance. If it does not, a reconciled transaction was edited or deleted, and you restore it. If it does, compare this month's statement line by line with the QuickBooks register to find the missing, duplicated or mistyped transaction, then correct that entry instead of posting an adjustment.

Why is my QuickBooks reconciliation off?

The usual causes are a reconciled transaction that was changed later, a bank feed line added twice, a transaction missing from QuickBooks, two digits swapped in an amount, a deposit entered as a payment, or a wrong ending balance or statement date typed on the reconcile screen. The size of the difference usually points to which one.

Should I just enter an adjustment to finish the reconciliation?

Only for a small, explained difference you have already searched for. QuickBooks posts the adjustment to a Reconciliation Discrepancies account, which your CPA will question at year end, and the real error stays in the books where it can grow next month.

Can QuickBooks find the discrepancy for me?

Partly. QuickBooks warns when the beginning balance changed and shows which reconciled transactions were edited or deleted. It does not compare your statement with the register line by line, so missing, duplicated and mistyped transactions in the current month are still found by hand or with reconciliation software. For the Desktop reconcile screen itself, see how to reconcile in QuickBooks Desktop.