Did you know…one of the best things you can do for the financial health of your business is reconcile your bank and credit card statements each month. Not only will this help you spot fraudulent transactions but it also helps you make well-informed decisions. After all, if your cash or credit card balance is wrong chances are good that something else is wrong as well.
In QuickBooks desktop go to the Banking menu and choose Reconcile then pick the account to reconcile from the drop down list. In QuickBooks Online go to the gear icon in the top right and choose Reconcile then pick the account to reconcile from the drop down list. After that, enter the statement closing date and closing balance to begin.
The goal of a bank or credit card reconciliation is to make sure that all transactions on your statement are recorded in QuickBooks. So start clicking the items in the QuickBooks reconciliation screen that match your statement. If all transactions match, your difference displayed on the QuickBooks screen should be $0. If it’s not then go back and add, delete, or edit transactions accordingly.
But before you click the button to finish that reconciliation, take a moment to see what you didn’t check off. What doesn’t match your statement is just as important as what does match. If you have checks that you wrote recently that didn’t clear by the end of the month or a credit card transaction that didn’t post before the statement was generated, it’s OK to still see those items unchecked on your screen. They’ll show up next month to be reconciled. But you may have duplicate transactions or incorrectly recorded payments or deposits unchecked and those signal problems that need to be corrected before completing your reconciliation.
Even though regular and successful bank and credit card reconciliations don’t guarantee that your books are error-free, they are an important part of making sure your financial data is in good health!