LaCrews Bookkeeping’s Blog

Reconciling your bank account is so important, this topic’s post is number two of a three part series.  Reconciling helps ensure the integrity/reliability of your financial reports, since your transactions ultimately affect cashflow.   Most likely you’ve been reconciling your bank account faithfully in QuickBooks, so here are some more tips to streamline the process.

6. Pick one side first
Don’t mix and match deposits and withdrawals. Reconcile your Deposits and Other Credits first, and then confirm that the total items you marked cleared ties to the amount shown on the Reconcile window. Then reconcile Checks and Payments — doing one side a time limits your search area for missing or misposted transactions.
 
7. Clear it out
If you get tangled up in a reconciliation, click the Unmark All button to start over.
 
8. Enter missing transactions
You can add missing transactions without closing the reconciliation window by choosing a command from the menu across the top or from the Home screen. Saved transactions will appear in the reconciliation window.

9. Check undeposited funds
Choose Banking, and then Make Deposits. If there are undeposited funds, complete the deposit process for these transactions.

10. Hide unnecessary transactions
Click the Hide Transactions after the Statement’s End Date check box and have fewer transactions to sift through.

More to come on reconciliation in part three of this three part post.

Although it may seem like drudgery, reconciling your bank account is a critical accounting task that you perform each month. It’s so important, this topic’s post is number one of three part series.  Doing so helps ensure the integrity/reliability of your financial reports, since your transactions ultimately affect cashflow. 

Most likely you’ve been reconciling your bank account all along in QuickBooks, so let’s identify some tricks and techniques to streamline the process.

1. Locate discrepancies
Click the Locate Discrepancies button to display the Locate Discrepancies window. From there, click the Discrepancy Report button to display the report.  It identifies any edited/deleted transactions that affect your reconciliation.   Ideally, your discrepancy report should never have any transactions listed.

2. Confirm your beginning balance
Your beginning balance should always tie to match what’s on your bank statement, but if you don’t know why it doesn’t, click the Undo Last Reconciliation button until you reach a point where the beginning balance matches your bank statement. You must then redo the reconciliations to bring your books current and resolve the discrepancy.  Yes, this is time-consuming!   However, if you reconcile each month, this is usually a non-issue.

3. Don’t forget interest and fees
Be sure to record any interest and fees.  Alternatively you can record deposit and check transactions to record interest and fees, or the very savvy can use journal entries. If you go this route, be sure to debit cash and credit interest income for interest earnings or credit cash and debit bank charges for any fees incurred.

4. Double-check your ending balance
Always double-check your ending balance input when you start the reconciliation. A simple transposition or other error here can make it appear that you’ve missed a transaction.

5. Look for transpositions
Sometimes you’ll mark all transactions as cleared, but still have a difference. In such cases,verify each transaction that you marked as cleared.  Edit those that have transpositions.  We’ve heard of a technique whereby you divide difference by 9—if it divides out evenly, then there’s a good chance that you transposed a number on a transaction. For instance, a $81 dollar difference divided by 9 equals 9 could mean that a transaction was entered incorrectly.   Let us know if you have success with that “divide by 9″ method!   

More on reconciliation in part two of this three part post.