How to Reconcile an Account in QuickBooks Desktop
A walkthrough of the standard reconciliation workflow in QuickBooks Desktop, from gathering statements to clearing transactions and resolving balance discrepancies.
QuickBooks Desktop’s reconciliation module gives users a structured window for matching recorded transactions against a bank or credit card statement, but a successful close still depends on having the right figures lined up before starting. We walk through the accepted community workflow below.
What to Gather Before Starting
Reconciliation runs smoothly only when everything on the bank statement is already entered in the company file. Before opening the tool, have a recent backup of the company file on hand, along with the bank or credit card statement for the period being reconciled. Confirm the beginning balance, ending balance, and statement end date on the document. If this is the first time reconciling the account, review the opening balance in QuickBooks to make sure it is correct — an incorrect opening balance is one of the most common reasons a first reconciliation will not zero out.
Starting the Reconciliation
From the Banking menu, select Reconcile and choose the bank or credit card account. QuickBooks auto-fills two fields: the statement date (usually 30 or 31 days after the previous reconciliation’s date) and the beginning balance (pulled from the ending balance of the last reconciliation). Verify both against the physical statement. If either value differs, the reconciliation will not balance correctly. Enter the ending balance exactly as it appears on the statement. If the bank assessed a service charge or paid interest that has not yet been recorded in QuickBooks, enter those amounts in the fields provided before continuing.
Working Through the Reconcile Window
After selecting Continue, the Reconcile window displays every transaction for the selected account. For bank accounts, the window separates deposits and other credits from checks and payments. For credit card accounts, the sections are labeled Charges and Cash Advances (purchases) and Payments and Credits (payments made to the card issuer). Working through one section at a time keeps the process manageable.
Start with the first transaction on the bank statement, locate the matching entry in QuickBooks, and compare the amounts. When they agree, place a checkmark in the column to the left of the transaction. This marks it as cleared. As transactions are checked off, the Cleared Balance at the bottom of the window adjusts — it decreases when payments and charges are cleared and increases when deposits and credits are cleared. The goal is for the Difference between the Cleared Balance and the statement’s ending balance to reach zero.
A few features inside the window help with larger accounts. Selecting Hide transactions after the statement’s end date limits the list to only the current period. Clicking any column header re-sorts the list, which is useful when more transactions appear in QuickBooks than on the statement. The Items You’ve Marked Cleared section shows a running total of the count and dollar amount of everything checked off so far — a figure that can be compared against the summary most banks print on their statements.
For accounts connected to online banking, selecting Matched and entering the statement ending date automatically checks off transactions that QuickBooks has already downloaded and matched, speeding up the process considerably.
When the Numbers Do Not Match
If the cleared balance and statement balance refuse to reconcile, QuickBooks offers a Locate Discrepancies button that generates reports to help pinpoint where earlier reconciliations may have been edited or where transactions were changed after they were cleared. If the discrepancy traces back to the beginning balance itself, the opening balance or a prior reconciliation may need correction. And if the reconciliation has gone off track entirely, selecting Undo Last Reconciliation returns the account to its previously reconciled state so the process can start fresh.
One rule holds throughout: if a transaction does not appear on the bank statement, do not mark it as reconciled. Outstanding checks, in-transit deposits, and pending charges belong in the window but should remain unchecked until they clear the bank in a future period.