The opening balance informs QuickBooks when you are planning to start transaction tracking in the account. In addition, it also helps in summarizing the older transactions. In the future, you might want to add transactions that are quite older than the opening balance. If you have added the older transaction recently to your account, you are required to review or edit the opening balance. Only after that, you will be able to start account reconciliation in QuickBooks. For in-depth details, find out how to reconcile old transactions in QuickBooks Desktop and QuickBooks Online.
- How to Reconcile Old Transactions in QuickBooks Online?
- Step 1: Track all the Details for your Older Transactions
- Step 2: Edit the Opening Balance
- Step 3: Reconcile Your Account
- How to Reconcile Old Transactions in QuickBooks Desktop?
How to Reconcile Old Transactions in QuickBooks Online?
The process of reconciling the old transactions can be tricky. Users should have to get the details from older transactions. For instance, connect the bank online and download the transactions to import. After that, you can edit the opening balance. This is a crucial step; here you have to adjust the opening balance carefully.
Once your opening balance is balanced, you can proceed with the account reconciliation. For more details, you can learn here how to reconcile old transactions in QuickBooks Online:
Step 1: Track all the Details for your Older Transactions
Even if you have already reconciled your account, the older transactions can also be added. As informed previously, you will have to edit the date and opening balance if you are adding the older transactions. This will also reset the starting point for your account so that QuickBooks does not count these transactions twice.
In the following discussion, you will learn to enter the older transactions and edit the opening balance in QuickBooks.
Enter the Older Transactions
If you have already connected your bank or credit card account with online banking, it becomes a lot easier to download the transactions from the bank. In case your bank or credit card account is not connected to QuickBooks Online, you can do this so the transactions can be downloaded. Here are the steps for connecting your bank with QuickBooks Online and downloading the transactions.
Connect Credit Card or Bank Account
Connecting the credit card or bank account gives you the advantage of downloading the transaction automatically. To link your bank account with online banking, you are required to follow these steps:
- Click on the “Banking” menu. You can also go with the “Transactions” menu.
- Switch to the “Banking” tab.
- If you are connecting the account for the first time, click on the “Connect Account” on a landing page. Otherwise, you can choose the “Link Account” or “Add Account” option.
- Now, you are required to look for your bank. Most banks can be connected easily.
Important Note: In case you are unable to search for your bank then upload the bank transactions manually.
- Once you find the bank, press the “Continue” button.
- Here, you can type your username and password for the bank’s website.
- After that, continue following the instructions given on your screen. Additional security checks might be required by your bank. Thus, it may take more time to connect.
- Once done, you can choose the credit card or bank account you wish to connect It could be current, saving, or credit card. Check all the available accounts at the credit card or bank.
- Later, you can choose the matching account type for every account you connect. This can be done by using the “Account Type” drop-down.
- At this point, you can decide how far back you wish to download the transactions. Most banks will allow you to download the transactions of the last 90 days whereas some banks let you go back to 24 months.
Download the Transactions
Although the transactions will be downloaded automatically, you can still refresh the page and get the latest transactions. For this, you can pursue the following steps mentioned below:
- Click on the “Transactions” or “Banking” menu.
- Then, switch to the “Banking” tab.
- Press the “Update” button.
Later, you can categorize the downloaded transactions. Once you are done connecting the account to online banking and downloading the transactions from the bank, you can manually import them. If you are not willing to connect your account to online banking then you can upload the transactions manually into QuickBooks Online. In addition, you can add individual transactions as expenses or cash memos.
Step 2: Edit the Opening Balance
Now you have the transaction, the next step is to edit the opening balance. All you have to do is locate the opening balance from the QuickBooks Chart of Accounts menu. Later, you can log in to the bank website and set the account for the opening balance. Once done, go back to your QuickBooks account, open the opening balance entry to edit. Once everything becomes balanced, you can reconcile the account. First, you should know how to edit the opening balance:
- Navigate to the “Account” menu.
- After this, choose the “Chart of Accounts” option.
- Now, you can search for the account and open it once found.
- Here, you can locate the account register labeled “Opening Balance Equity” for your opening balance entry. You will see the account register with opening balance in the column of “Memo”.
- Once done, log in to the bank website.
- Then, set the account so that you can find the balance for the date you wish to use for your opening balance in QB.
- Now, return to QuickBooks.
- After that, choose the opening balance entry.
- At this stage, you can make the required changes for the opening balance so the amount and date match the bank records for a particular date you prefer.
As you perform these steps, the new opening balance will be updated for your account. Now, your new opening balance is matched with the bank records, your account becomes balanced. Thus, you can initiate the reconciliation.
Step 3: Reconcile Your Account
To reconcile the old transactions, it is important to fix the opening balance. Since you have fixed it already, your account is ready for reconciliation. Learn here how to reconcile old transactions in QuickBooks Online:
- Make sure you are logged in to “QuickBooks Online”.
- Then, go to the “Settings” menu.
- Select the “Reconcile” option. You can also click on the “Get Started” button if you are reconciling for the first time.
- Now, move to the “Account” drop-down menu and choose the account that needs to be reconciled. Please make sure it is the same account as the one available on the statement.
- Once done, you can check the “Beginning Balance” option. Please note the beginning balance should match with the one specified on the statement.
- After that, you can add the “Ending date” and “Ending balance” on the statement.
- Now, check the “Last statement ending date”. This is basically the end date of the recent reconciliation. And, your current statement should start a day after.
- When everything is reviewed, hit the “Start reconciling” button.
Once you successfully reconcile the account, it is important to compare the transactions on the statements with what is there in QuickBooks. You can check each transaction one by one. Make sure you check each transaction and date in QuickBooks to make sure that everything is properly matched.
In case the transactions do not match, you can edit the opening balance to balance everything. If required, you can check the past reconciliations. If you are still facing issues then you should fix the issue and start with reconciliation.
How to Reconcile Old Transactions in QuickBooks Desktop?
If you want to reconcile the old transactions in QuickBooks Desktop, you can follow the one year at a time method. Every detail you enter such as all the adjustments, interest, and service fees will be applied to the year when the transactions have occurred. To learn how to reconcile old transactions in QuickBooks Desktop, check out the following steps:
- Click on the “Banking” menu.
- Then, choose the “Reconcile” button.
- After this, you can choose the “Account” drop-down arrow to select the account that needs to be reconciled.
- Now, you can switch to the “Statement Date” section and select the date from the statement that you chose.
- Moving on to the “Ending Balance” field. Here, you can type the ending balance from the statement.
- Once done, start comparing the amount displayed in the “Beginning Balance” section with an opening balance specified on the old statement that you want to reconcile. In case the beginning balance is not matching then go to the “Reconcile” window and fix the balance issue.
- Thereafter, you can add the whole “Interest Earned” or “Service Charge”. These are the steps one should consider:
- Enter the service charges from all your financial statements for the portion of a year or the whole year you reconcile. Then, add the total in the field of “Service Charge”.
- After this, add the statement date using the selected financial statement.
- Once done, click on the “Account” drop-down menu and select the correct account for your service charges.
- Then, go to the “Interest Earned” field and follow the same steps we shared just above.
- Now, click on the “Continue” option. This will take you to the “Reconcile” window.
- Click on the “Hide transactions after the statement’s end date” option located on the top right. Doing so, QuickBooks will show you the transactions dated before or on the statement date.
- After that, place the checkmark for each transaction so that it can be displayed on the financial statement you chose. You can repeat the same steps for each statement.
- When you are done, all the transactions should be chosen, and then check the “Different” amount at the bottom. While doing so, consider the following steps:
- If you see the difference as “0.00” then choose the “Reconcile Now” button. It indicates your account is successfully reconciled.
- However, you may not see a “0.00” difference which indicates your account is not balanced for the current period.
In such cases, you need to check all the amounts and transactions that you have recorded. After making the adjustment, you can try again later.
There can be occasions when you want to reconcile the old transactions in QuickBooks. This can be done easily. All you have to do is download the transactions, edit the opening balance, and if everything is balanced, you can start the reconciliation. Both QuickBooks Online and QuickBooks Desktop users can perform the account reconciliation. We hope you have understood how to reconcile old transactions in QuickBooks Desktop and Online.
To know more about reconciling the bank statement or sharing the QuickBooks Online with an accountant, you can go through these guides:
- How to Reconcile a Bank Statement in QuickBooks?
- How to share QuickBooks Online with Accountant?