Reconciling Accounts Using QuickBooks Online
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Reconciling your business accounts is an important task when owning a business. Preparing proper documentation and ensuring your reports are correct can prevent overdrafts or incorrect business decisions based on wrong information.
When you reconcile your accounts, everything should balance. Here are the steps to reconcile accounts using QuickBooks Online.
1. Connect your Bank Accounts to QuickBooks Online
You must connect your bank accounts to QuickBooks Online so you can download the transactions to your QuickBooks account monthly. This eliminates the need to enter everything manually and reduces the risk of errors.
2. Reconciling Accounts
Before you can reconcile your transactions, you must reconcile your accounts. This is easy with QuickBooks Online.
Start by adding, matching, or categorizing your accounts. For example, if you already have an invoice or receipt for a specific expense, match it. You can add a category and categorize the expense if there isn’t a match.
QuickBooks might automatically assign a category, but you can manually change it if you disagree with the categorization.
Go through each expense line by line to categorize everything and ensure you’re ready for account reconciliation.
Your final step is to reconcile. Here’s how.
Select Reconcile from the Tools menu. Match the beginning balance from the bank statement to what’s in QB. Enter the ending balance, including any interest or service fees, and click Reconcile.
You’ve reconciled if you have a $0 balance when it’s over. First, ensure you’ve entered the correct beginning and ending balances if there’s a difference. If either is incorrect, go back through your transactions one by one to see if you missed one or entered one incorrectly.
While it might take some time to find the errors and reconcile them, it’s best to do it monthly rather than putting it off. When you put the task off, you’re stuck with months of errors and reconciling, which could take many more hours of hassle and stress.
If reconciling your accounts is too much work and stops you from growing your business, hire a reputable accountant to handle the task, leaving you more time to run your business. You’ll have accurate books and time to create the business you desire. Contact me today for more information.