How to Reconcile Bank Accounts in QuickBooks Online

Reconciling means proving that your books agree with your bank statement. It's the most important monthly bookkeeping task and the one most often skipped. Here's how to do it in QuickBooks Online and what to do when it won't balance.

Before you start

• Download the bank or card statement for the month, as a PDF from online banking.
• Make sure every transaction for the month has been added or matched from the bank feed.
• Confirm the previous month was reconciled. If it wasn't, start there.

The steps

1. Open Reconcile (find it under the bookkeeping or transactions menu, or the gear icon, depending on your QuickBooks version).
2. Choose the account and enter the statement ending date and ending balance exactly as shown on the statement.
3. Tick each transaction in QuickBooks that appears on the statement. Deposits on one side, payments on the other.
4. Watch the Difference figure. When every statement item is ticked, it should be 0.00.
5. Click Finish now and save the reconciliation report.

When the difference isn't zero

Work through these in order:

• Wrong beginning balance. If the beginning balance doesn't match last month's statement ending balance, a previously reconciled transaction was changed or deleted. QuickBooks' reconciliation reports help find it.
• Missing transactions. A fee, interest charge or transfer on the statement that isn't in QuickBooks. Add it.
• Duplicates. The same transaction imported from the feed and entered by hand. Delete or exclude one.
• Wrong amounts. Compare amounts line by line; transposed digits (54 vs. 45) leave a difference divisible by 9.
• Wrong dates. A transaction dated in the wrong month belongs on a different statement.

Avoid entering an adjustment just to make the difference zero. It hides the real error, and it usually resurfaces at tax time.

Do it every month, for every account

Reconcile checking, savings, every credit card, loans and payment processors such as PayPal or Stripe. Loans are reconciled to the lender's statement, which also tells you how much of each payment was interest.

Make it routine

Reconciliation takes minutes when done monthly and hours when done annually. If it keeps falling to the bottom of the list, our bank and credit card reconciliation is part of every monthly bookkeeping package, and past months can be caught up in a cleanup.