Quickbooks Bank Reconciliation Tips

Accounting software usually houses a company's general ledger. QuickBooks is the most popular software with small business.

The General Ledger (commonly referred to as the G/L) is the central accounting documentation of a business which uses double-entry bookkeeping. The G/L usually includes accounts for current assets, fixed assets, liabilities, revenues, expenses, gains and losses.

The bank also creates a statement of the company's bank account when it handles the company's checks, deposits, service charges, and other items. When the company receives the a bank statement, the company should confirm that the amounts are in agreement with the amounts in the company's cash account in its accounting software and vice verse. The process of verifying the amounts in the G/L to the bank statement is known as reconciling, bank statement reconciliation, bank reconciliation, or doing a bank rec. The advantage of reconciling is knowing that the amount of cash reported in the company's books is consistent with the amount of cash shown in the bank's records.

Here are the two pointers.

1. The number field for check input should be blank for withdrawals, ATM transactions or debts done electronically. Bank statements usually list their withdrawals not done by check chronologically in one section.

Verifying one section of the bank statement at a time is helpful. Each section usually has a subtotal. In the QuickBooks reconciliation function, transactions display chronologically.

Depending on the QuickBooks version of software that is running, the columns can be sorted by date, check number or amount. This is helpful to isolate and verify totals to the bank statement. The arrangement that withdrawals appear in the QuickBooks bank reconciliation function is as follows.

• Withdrawals that are not in a check form and the number field blank are sorted by date

• Withdrawals with descriptions like "Debt" or "ATM" in the check number field are sorted alphabetically. This can make isolating totals to the debit section of the bank statement difficult.

• Checks with a number in the check number field.

2. Record payments for each customer separately. Record all deposits in the Undeposited Funds account, then the total amount of payments are transferred to the bank account. This treatment facilitates matching all the payments made on the same day to exactly what is on the bank statement for that day. Therefore the amount that appears in the deposit window of the QuickBooks reconciliation window will equal what appears on the bank statement.

Some clients engage in an infuriating game of mathematics by adding up multiple deposit amounts in QuickBooks to get an amount identical to that on the bank statement.

Ten Basic Rules

Here are ten basic rules to follow. These basics will help when the work
is frustrating.

1. Locate discrepancies
2. Confirm your beginning balance
3. Don't forget interest and fees
4. Double-check your ending balance
5. Look for transpositions
6. Pick a side, any side
7. Enter missing transactions
8. Check undeposited funds
9. Hide unnecessary transactions
10. Clear voided transactions

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