4 QuickBooks Reconciliation Tips From A Bookkeeping Expert

| 3 min read

4 QuickBooks Reconciliation Tips From A Bookkeeping Expert

When using the QuickBooks reconciliation feature there are several tips and tricks you can use to make the process smoother.  Start practicing the below techniques and I guarantee your QuickBooks reconciliation process becomes simpler and more efficient.  

Reconcile The Major Account Last

When starting your monthly QuickBooks reconciliation I would highly recommend starting with the smaller accounts first.  I would start with all credit cards and loans before moving on to savings, payroll and finally the general checking account.  You want to first focus on the accounts that have an impact on the general checking account.  Also be sure to enter certain transactions like your outsourced payroll entries before downloading transactions into QuickBooks.  This will allow the transaction to be matched up to your downloaded transactions.

Learn How To Sort The Reconciliation Screen Effectively

This is the biggest tip in here so pay attention.  To many QuickBooks users don't sort the reconciliation screen appropriately.  If you have a large volume of transactions, knowing how to find and clear them quickly is important.  Sorting by amount can be a huge time saver, especially with deposits.  If you have credit card merchant deposits coming into the checking account you probably have a lot of very unique numbers.  Sorting by amount by clicking on that column can make your QuickBooks reconciliation much more efficient.  Sorting your checks and payments side of the reconciliation by check # is an obvious choice.  When going through a bank statement line by line I always disregard checks until the very end.  The reason is bank statements always list cleared checks in numerical order at the end of the statement.  Hot tip: If you have a series of transactions to clear in a row (like a long sequence of checks) hold down the left click button on your mouse and drag your cleared status through the entire sequence.  

When To Download And When Not To

It is important to know when downloading transactions into QuickBooks is effective and when it is not.  If you are manually recording sales on a daily basis, downloading bank transactions into QuickBooks may not work as effectively as you had hoped.  Most of the hang up is on the daily credit card merchant deposits.  Typically Amex groups weekend transactions together and deposits them as a lump sum for two days sales.  QuickBooks will not make this connection for you and match these deposits up.  Another limitation would be if you are manually entering some of the checks/payments but not all.  If you enter a payment to a particular vendor with a specific amount and date it accordingly QuickBooks may not match that to your downloaded transactions.  The hang up is on the date you enter it.  As an example if you enter the date as 3/17/12 and it hits your bank on 3/19/12 QuickBooks will not make the connection.  It never hurts to try downloading transactions into QuickBooks to see if it will be effective for you because you can always delete the downloaded transactions.

Use Recalled Transactions Effectively

I am a huge advocate of using the automatically recall information feature in QuickBooks.  This can be found under Edit/Preferences/General/My Preferences tab.  By turning this feature on QuickBooks will automatically recall the last transaction or account used for the particular vendor you are paying.  This can be a powerful tool if used appropriately.  My best example involves using Amex as a vendor.  Many businesses use Amex as both a credit card they pay
but also a merchant processor that deposits Amex payments.  I would suggest three different vendors to handle this appropriately:

1.  Amex-last 5 digits on card # to handle payments from your checking account to your particular Amex card

2.  Amex Finance Charge - to handle any finance charges assessed to your Amex credit card

3.  Amex Merchant discount - to account for your merchant processing fee expense

The reason I separate them out this way is to make QuickBooks smarter and more efficient.  By doing so QuickBooks automatically recalls your Amex credit card payments as coming out of your checking account, Amex Finance charges as being a bank charge expense and Amex Merchant discount fees as being a merchant processing expense.  If you set up QuickBooks this way you will have to do very little changing of the recalled transactions.

Some businesses QuickBooks reconciliation procedures are fairly painless.  For more advanced and complicated accounts use the above QuickBooks tips to boost your efficiency and make the whole process less painful. 



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