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In QuickBooks Pro 2010 Essential Training, author Bonnie Biafore shows how to most efficiently use this popular business accounting software to manage business finances. The course covers core QuickBooks features that business owners need to know, from recording typical bookkeeping transactions like bills and invoices, to reconciling accounts and managing company files. Exercise files accompany the course.
If your QuickBooks account and bank statement aren't playing well together, the problem could be transactions that you forgot to record. In that case, it's easy to add those transactions during reconciliation. On the other hand, if the cleared balance and QuickBooks refuses to match the ending balance on your bank statement, you might have recorded a transaction incorrectly, or your bank could have made a mistake. You have to track down those discrepancies and correct them in QuickBooks or work with your bank.
On the right side of the Reconcile window, QuickBooks shows the ending balance you type for your bank statement, $9760.99 in this example. The cleared balance is the balance in QuickBooks based on all the transactions you cleared during the reconciliation. If the two don't match, the difference value will not be zero, like the number shown here. If you forgot to record some transactions that you need to reconcile, you can do that in one of two ways.
If you can see your bank account register at the same time as the Reconcile dialog box, you can switch to the Register window and add your transactions there without leaving the reconciliation. For example, say you took out $100 for the petty cash account. On the Banking menu, choose Transfer Funds and record the $100 transfer. I have just filled out the transfer for $100 to petty cash. When you go back to the Reconcile window, the $100 ATM withdrawal is there. Select it.
QuickBooks turns on the checkmark cell to show it is cleared. The other way to record forgotten transactions is to click Leave. Record the transactions you forgot, then on the homepage click Reconcile. In the Begin Reconciliation dialog box, click Continue. You can select the new transactions and go on with your reconciliation. Another mistake to look for is transactions that you cleared or uncleared by mistake. For example, this reconciliation has an end date of 01/31/2010 but the transaction on February 2nd is cleared.
Click the checkmark cell to toggle the checkmark off in this case. When the checkmark is on, you have cleared the transaction during reconciliation. When it's off, the transaction is not included in the reconciliation. If the difference still isn't zero, another culprit could be duplicate transactions. For example, you might pay a bill for an expense but also write a check for the same expense, or if you use online banking, you might download a transaction and not match it to the one you already recorded.
If you find a duplicate, you can go back to your bank account and void the duplicate transaction. For example, there are two payments to Speedy Messenger Service for $52.50. One has a check number and one doesn't. Turn off the checkmark for the one without a check number. Then back in the checking account register, you can void the transaction. To do that, right-click the transaction and choose Void Check.
Click Record to complete the void transaction. Back in the Reconcile window, there is one last problem. The difference is $1,000. If you record deposit as a payment or vice-versa, you end up with a difference that is twice the amount of the transaction. For example, if you record a payment of $500, you reduce the balance by $500 but you meant to record a deposit of $500, which increases the balances by $500.
That's why the difference in the balance is $1,000, twice the transaction value. Check 107 to insurance is for $500. It turns out that was supposed to be a deposit of a claim check. Go to the checking register and void the payment. Click Record to complete the void. Now you can record the deposit of the claim check. Back in the Reconcile window, select the deposit.
Finally, the difference is zero. You can click Reconcile Now. Once again you can display reconciliation report, print them or just close the dialog box. There is one other source of discrepancy. You might have transposed numbers when you recorded a transaction. For example, say you type $12.34 but meant to type $21.34. If you clear the transaction, it's hard to spot this kind of mistake.
If you looked for all the other issues and still have a discrepancy, compare the numbers in QuickBooks very carefully with the numbers on your bank statement. When you finish the reconciliation, all the reconciled transactions in your check register have checkmarks in the checkmark column, which is the Cleared Status column, and you are all ready to go on keeping your books.
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