When you receive a bank statement, it should match with your bank transactions. After matching the transactions, it should become zero. However, some users fail to reconcile the transactions or match the difference. If you are also experiencing a QuickBooks reconciliation discrepancy then you should fix it. Thus, we bring you this guide where you will learn how to fix reconciliation discrepancies in QuickBooks Online and Desktop.
- What is Reconciliation Discrepancies in QuickBooks?
- Why Do You Experience QuickBooks Reconciliation Discrepancy?
- How Do You Fix Reconciliation Discrepancies in QuickBooks Online?
- Step 1: Review the Beginning and Opening Balance
- Step 2: Verify the Ending Balance
- Step 3: Combine Several Transactions in One Transaction
- Step 4: Filter the Correct Transactions
- Step 5: Enter the Transaction that is Not Available in QuickBooks
- Step 6: Eliminate the Transactions that Are Not on the Bank Statement
- What If the Transaction Was Not on the Past Reconciliation Report?
- What If the Transaction Was on the Past Reconciliation Report?
- Step 7: Check the Transactions that are Not Right
- How to Fix Reconciliation Discrepancies in QuickBooks Desktop?
What is Reconciliation Discrepancies in QuickBooks?
To keep the account accurate, QuickBooks users reconcile the bank transactions with the bank statements. It is even suggested to reconcile the bank account every time you find the statement.
While reconciling the account, users compare the bank transaction against the bank statement. After that, the difference between the reconciled balance and the statement ending balance reduces. As a result, the difference becomes zero ($0.00), the transactions are matched. Also read about QuickBooks 61 error or rebuild account balance failed error.
If the difference does not display zero then there must be some problem with the steps you followed. This is when you should find and fix the QuickBooks reconciliation discrepancy adjustment.
Why Do You Experience QuickBooks Reconciliation Discrepancy?
As you reconcile your account, you may enter wrong details which results in discrepancies. There can be a couple of reasons behind such a QuickBooks reconciliation discrepancy report.
- At the beginning of the reconciliation, you have entered the incorrect ending balance.
- There are duplicate transactions or missing transactions in your QuickBooks account.
- Some user has entered the transaction into QuickBooks that has not cleared the bank yet.
How Do You Fix Reconciliation Discrepancies in QuickBooks Online?
To fix the reconciliation discrepancies, you are required to review the beginning and opening balances. Thereafter, you can try combining several transactions into one transaction. Then, remove those transactions that you think are correct and enter the transactions that are not available in QuickBooks.
Once done, you can eliminate the transactions that are not on the bank statement. Later you can review the transactions and finish reconciling them.
Now, let’s follow the manual procedure for QuickBooks reconciliation discrepancy adjustment.
Step 1: Review the Beginning and Opening Balance
Before proceeding further, you should know how to find reconciliation discrepancies in QuickBooks Online so that you can review the beginning and opening balance. Whether you are reconciling the account for the very first time or the second time, you need to make sure that the opening and balance should be accurate. If it is accurate then you can switch to the next step.
Step 2: Verify the Ending Balance
When starting the account reconciliation, users add the ending balance from their bank statement. Once you do so, Quickbooks starts reviewing the balance for accuracy. Hence, it is important that you enter the correct amount.
To review the ending balance that you have entered earlier, you can follow these steps:
- Go to the “Reconciliation” window.
- Then, click on the “Edit Info” option.
- Now, you can review the “Ending date” as well as “Ending balance”.
- Here, you can review the bank statement. If it is required then add the necessary changes.
- Later, you can save the details by hitting the “Save” button.
After reviewing the ending balance, if you are still facing issues to see the difference zero then you should move on to the next step.
Step 3: Combine Several Transactions in One Transaction
In case your bank combines multiple payments as one record then you should try doing the same with your QuickBooks accounts. There can be instances that we add the payments individually. This makes us think there are errors. If you think that you have not combined the several payments in QuickBooks then put them in your Undeposited Funds account. After that, create a Bank Deposit in order to combine them into one single record.
Even after combining the multiple payments, if you still find discrepancies then follow other steps to fix them.
Step 4: Filter the Correct Transactions
If you have reviewed every possible problem then you should now filter the transactions. All you are required to do is remove the transactions that you think are correct. This way you can narrow down the result and find the transaction that is causing errors.
To not make it a mess, we suggest you take out a print and filter the transaction physically. All you are required to do is take out the bank statement and mark the transactions that are totally matching with the one you have entered in your QuickBooks account. Remember the matching transactions do not cause errors.
The shorter list will help you to identify the cause in transactions easily. However, if you are still facing errors, look for the next step.
Step 5: Enter the Transaction that is Not Available in QuickBooks
Now the transactions that are not available in QuickBooks, you need to add them to ensure that you have entered every detail in your account. If you have connected the account with online banking, make sure you review and categorize the downloaded transactions. Only after that, you will be able to reconcile them.
Thereafter, you can review the transaction lists. This can be done from the Reconciliation window. In case you find any transaction on the bank statement that is not available in QuickBooks then follow these steps to enter it.
- Open “QuickBooks” and click on the “Expenses” or “Sales” menu.
- Then, search for the transaction you see on the bank statement but not in the QuickBooks account.
- If any transaction is found, click on it to open.
- Now, check the “Payment” or “Deposits to” account. Also, you need to ensure that the transactions have the correct account. Now, you can choose a different account as required.
After checking QuickBooks, you can add the missing transactions. In addition, you can use the bank statement as a guide. Make sure you enter the bank statements (that are not in QuickBooks) as new expenses or sales receipts.
Step 6: Eliminate the Transactions that Are Not on the Bank Statement
In this step, we will do the opposite. Here, we will remove the transactions that are not available in your bank statement. All you have to do is review your transaction in the Reconciliation window. Then, you can check if there are any transactions that are not in the bank statement. If yes, then do the following:
- Review the date of the transaction and the bank statements for that time.
- Then, note down the amount and date of the transaction.
- After that, you can run the report for those dates. Past Reconciliation reports will be beneficial to run.
What If the Transaction Was Not on the Past Reconciliation Report?
In case the transaction was available in the old bank statement but not on the past reconciliation report for specific dates then you can follow these steps:
- Click on the “Accounting” menu.
- Then, choose the “Chart of Accounts” option.
- Now, you can locate the account that you are reconciling.
- Once found, you can click on the “Account history” option.
- After that, you can find the transaction and open it by expanding its view.
- At this point, if you see the box unchecked or has C then make sure your transaction is accurate.
- Thereafter, you can place the checkmark until it shows R in the column. In case you find the R already then leave it.
- Once done, click on the “Save” button.
What If the Transaction Was on the Past Reconciliation Report?
If you find the transaction available on the past reconciliation report for specific dates then you can look for the duplicate transactions. Here are the steps for that:
- Navigate to the “Expenses” or “Sales” menu.
- Here, you can sort the lists by customer, date, amount, or supplier.
- In case you find any duplicate transactions, you can remove them.
Important Note: Delete Expense transactions only when you are sure that this is a duplicate. For not being sure, you can ask for help from your bookkeeper.
- Now, press the “Accounting” menu.
- Click on the “Chart of Accounts” option.
- After that, you can locate the account that you are reconciling.
- Then, click on the “Account history” option.
- Now, you can find the transaction and open it by expanding its view.
- Here, choose the “Delete” button.
- Click “Yes” to confirm your action.
This is how you can find duplicate transactions and remove them if they are not available in your bank statement. Now, switch to the next step.
Step 7: Check the Transactions that are Not Right
There can be instances when the QuickBooks transaction matches the transaction on the bank statement but you may find the amount slightly off. In such a scenario, you can talk to your accountant.
Remember that it is not suggested to edit your transactions such as invoices that your customer has already paid for.
Sometimes, your bank account adds the fees to your transactions that were not included when entering it into your QuickBooks. You can check the bank statement.
- Click on the “+New” button.
- Then, select the “Bank Deposit”.
- Now, you can add the processing or bank fee to the account which you are reconciling.
- Here, you can enter the note about which transaction it is tied to. You can add these details in the “Memo” section.
Note: In case you cannot find any errors even after pursuing these steps then the problem must be with your credit card company or bank. You can check for the mistakes on the credit card statement or bank.
Once you are done following these steps, your account must be balanced. After that, you can finish the process of reconciliation.
How to Fix Reconciliation Discrepancies in QuickBooks Desktop?
When some made the adjustment to the last reconciliation with your journal entry, you may experience ending balance issues. There can be other reasons too for which you are facing QuickBooks bank reconciliation discrepancy. If you don’t find the account matched with the bank statements in QuickBooks Desktop, we will help you to fix that.
To understand the whole concept, you can follow each step carefully.
Step 1: Review the Opening Balance and Check for the Edited, Added, or Deleted Transactions
First of all, you need to review the beginning and opening balance in QuickBooks Desktop. Once you ensure that the balance is accurate then you can move on to the next step.
QuickBooks offers a number of reports to run so that you can find certain details. Such reports can be used to look for the added, changed, or deleted transactions in QuickBooks Desktop.
Here, in these steps, you are required to run the Reconciliation Discrepancy Report, Missing Check report, and Transaction Detail report. Let’s see how to do that.
Reconciliation Discrepancy Report
Reconciliation Discrepancy Report can be used to find the changes since the last reconciliation. They are usually sorted by the date of statements. To run this report, you can take help from the following steps:
- Click on the “Reports” menu.
- After that, you need to hover the mouse over the “Banking” menu.
- Then, click on the “Reconciliation Discrepancy” option.
- Now, you can click on the account that you are reconciling.
- Click the “OK” button.
- Once done, you can review the report.
- At this point, you can search for the discrepancies.
If you spot any changes, you can ask the user who made these changes to know the reason. And, as per the need, you can edit the transactions.
Run the Missing Checks Report
By running the Missing Checks report, you may spot the ending balance of the reconciliation. Here are the steps you can follow to run this report.
- Navigate through the “Reports” menu.
- Now, you can hover the mouse over the “Banking” option.
- Then, click on the “Missing Checks” option.
- After that, you can choose the account that you are reconciling.
- Press the “OK” button.
Once done following these steps, you can review your report where you find any transactions on the Missing Checks report that are not on the bank statement. If you don’t find the transaction on the bank statement then it should not be on the reconciliation.
Run the Transaction Detail Report
If any of the transactions is changed, you can find out by running the Transaction Detail report. To find out all the details, you can do the following:
- Click on the “Report” menu.
- Now, hover the mouse over the “Custom Reports” option.
- From here, you can click on the “Display” tab.
- Go to the “Date From” field and choose the earliest date for your account.
- Now, go to the “Date to” field and click the date of the last reconciliation.
- Then, switch to the “Filters” tab.
- From the “Account” field, click on the account that you are reconciling.
- After that, switch to the “Entered/Last Modified” field.
- Set the date of the last reconciliation in the “Data from” section.
- Then, set the date of today in the “Date to” field.
- Press the “OK” report to run the report.
At this point, you can be required to check for the transactions or discrepancies that do not match the bank statement. Thereafter, you can ask the person who has made the changes and make the necessary changes.
Step 2: Check for the Reconciliation Adjustments
In some cases, you may create reconciliation adjustments in order to force the account so that it can match the bank records. Here, we suggest you check for the reconciliation adjustment. But make sure you do it with the guidance of your accountant.
To review your account and ensure that there is no inaccurate adjustment, you can follow these steps:
- Click on the “Lists” option.
- Then, choose the “Chart of Accounts” option.
- Now, you can open your “Reconciliation Discrepancies” account.
- Go to the “Dates” field and set the date for the last few reconciliations.
If you find any adjustment due to which your account balance is inaccurate then reach out to the person who made these changes. After that, you can make the necessary changes to make sure that nothing is conflicting.
When you fix everything, finish the process of reconciling. In case you fail to do so, then undo your previous reconciliation until you see the correct amount in the opening balance. This should be noted that if someone deleted or edited the transaction years ago then you will be required to undo the reconciliation for the past years to find out the correct opening balance.
To Sum Up
QuickBooks users reconcile the bank transactions with the bank statements to keep the account accurate. However, if there is a wrong amount, you may experience a QuickBooks reconciliation discrepancy. To fix or adjust it, you need to check the details you have entered into your account and correct the opening and ending balance. In addition, you will be required to run a few reports to spot the issue so that you can correct it. We hope we have solved your problem through this guide.