Combined QuickBooks Bank Reconciliations

Filed in Intuit QuickBooks, Mike Block CPA, Personal by on November 22, 2010

It is often a big help to use additional QuickBooks bank reconciliations on the same date. This involves using a largely undocumented feature: Combined QuickBooks Bank Reconciliations. These Combined QuickBooks Bank Reconciliations are one way to make yourself look smart and make CPAs happier. You cannot, however, find them with a Google search for quickbooks and “combined bank reconciliations.” Only the determined find this mention form Intuit.  

Combined QuickBooks Bank Reconciliations are very useful because most non-professional users simply check off bank entries that clear. However, they ignore impossible uncleared entries. Anything not cleared in six months is probably dead. Individual credit and debit card receipts or payments, not cleared in a few days, are also dead. It is rare that these involve cases where QuickBooks users or others did not bother to deposit items. As a very experienced QuickBooks CPA reviewer, I often find many such old dead QuickBooks bank reconciliation items. Occasionally they involve disputed replaced checks. However, most involve items that were never sent or received, so you should carefully consider why you have them.

You should rarely void these entries, unless you find them in the month in which they happened. This can effectively void the integrity of your prior tax return, financial statement or bank reconciliations, depending on the age of the entry. You instead need what I call a bogus (phony) contra entries. By this I mean that you make a new entry, in the current or first prior month, which reverses the earlier entry. Whether you make it in the current or first prior month depends on whether you already issued a tax return or financial statement for the month.

For example, if your old item was a $100 check to XYZ for Repairs, you first make a new deposit for $100 from XYZ for Repairs. Add a memo, to the original entry, to e explain when you reversed it. You also can use the original check or other number with RV (reversed) and the original date reference to the new entry. This is harder if you use Accounts Receivable or Payable, as you must either create contra entries for both Accounts Receivable or Payable entries, or ignore these accounts and only contra the original sale or expense account (as I do). If the item involves payroll or inventory, you have a further problem that is beyond the scope of this post.

My point involves my simple example and Combined QuickBooks Bank Reconciliations. You automatically create Combined QuickBooks Bank Reconciliations by entering the SAME ENDING DATE (and amount) as the prior bank reconciliation. You then ALWAYS, for ALL bank reconciliations, check the top right box to disregard entries after the statement date. This should be a QuickBooks default, as you never want to consider such later entries in bank recs. It limits your display to old outstanding entries, including the dead item and the new bogus entry. Simply check off only the dead item and the new bogus entry. Of course, you can do this for many old entries at once. Then Reconcile (finish) the bank rec.

QuickBooks automatically updates your prior bank rec with your new Combined QuickBooks Bank Reconciliations.

 

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Fastest, easiest, accurate, low-cost QuickBooks! Intuit - QuickBooks CEO, "You're fantastic Mike! Absolutely fantastic!" Tax fighting CPA.

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