Here are five very important QuickBooks bank reconciliation tips that few know and fewer use. You always should use them:
- Before doing a new reconciliation, check that the prior bank statement balance is the same as the one shown in the startup screen. If not, use Locate Discrepancies to find what changed this. Then do a second bank reconciliation, for the prior date, to correct any errors. You can make journal entries to Open Balance Equity or Stockholder Loan for this, but be sure to include appropriate explanations. If you are unsure about this, or have other QuickBooks problems, please email or call me.
- Check the top right box, in the Reconciliation screen, to ignore entries after the statement date. They cannot affect the reconciliation and only slow you down.
- Never check off each outstanding check and deposit. Check the Mark All box at the bottom middle of the reconciliation screen. Then check off only the items that did not clear. You do this because you usually have many fewer outstanding items than cleared items. Most banks also have a * next to the first item following a break in check numbers. You should start by reviewing items right before the * marks, old items and items near the end of the statement. Only note check numbers initially. If you have a difference after this, read the bottom left (MICR) amount on each check or the bank statement numberic listing. This is what the bank paid. The amount on the check or in QuickBooks may differ.
- Look at the lower left Deposit and Checks line as you check items. They have amounts and item counts that should match bank statement totals. Once you know that the QuickBooks total for receipts or payments matches the amount from the bank statement, you can concentrate on the other category.
- Always note the amount of the unreconciled difference. You are done once it is zero, even if you have many more receipts or payments to check. You also can concentrate on items with pennies, dollars or large amounts, if the difference is one of these. You might even note if the amount is divisible by nine. If so, you may have a transposition (possibly 54 vs 45, 63 vs 36, etc.).