How to Reconcile Accounts on QuickBooks
Question: I reconcile my bank account by hand. Do I need to do it in QuickBooks too?
Answer: QuickBooks does have a reconcile function on all its products. It lists all the items that you posted as bank items, and then asks you to compare these to your actual bank statements.
The QB Reconcile function is intended to catch and correct errors like incorrect amounts, omitted items, double-entered items and so on. Every item on the bank statement is to be checked as reconciled in your QB bank register.
Reconciliations are important for catching errors, and also important should you be audited, seek a loan or want to sell your business. The reconciliation opening and closing balances should match those on your bank statements, which can be verified by outsiders (auditors, lenders or prospective buyers).
If your bank account is used strictly for business (as it should be), accurate reconciliations, which can be compared against the bank statements, show clearly that all cash in and out of our business has been accounted for in QuickBooks. Having your bank account reconciled in QB is a proof your books are accurate.
Premier and Enterprise also have a reconciliation report that shows the items included in each month’s reconciliation and they are saved for future use and reference.
Please email your questions to Harriet at Ask The Accountant.
QuickBooks Premier and Enterprise can be modified to better serve ad specialty distributors. Harriet Gatter is a QuickBooks ProAdvisor, a former accounting professor and a former ad specialty distributor. She advises ad specialty distributors to use QuickBooks Premier and Enterprise, often in conjunction with other industry-specific software, to manage the complexities of the ad specialty business, with the results being time saved, errors eliminated and an overall accurate accounting of your business. Contact her at firstname.lastname@example.org.