The Answer Room: Banking & Reconciliation

Hello Community! Today we are here to chat about the importance of streamlining your transaction management and reconciling on a monthly basis, as they are both crucial steps in the bookkeeping process. In our latest Answer Room event, hosted on the QBCares X Spaces, we went over how you can keep your bank transactions flowing smoothly into QuickBooks Online, as well as best practices for reconciling your accounts.

So let’s dive in and go over what we discussed! 

Import Transactions in QuickBooks Online

Banking Rules and Transaction Review

Reconciliation

Post Reconciliation

Additional Resources

Import Transactions in QuickBooks Online

Tracking your transactions in QuickBooks Online can be done both automatically and manually. For ease of mind when it comes to ensuring that none of your transactions are overlooked, you can link your bank accounts directly to your QuickBooks feed, where they’ll all import automatically. However, when you link your accounts, some banks may limit the automatic imports to 90 days, while others will import all the way back to 24 months prior. 

For more info on connecting your bank accounts, feel free to check out the following article here.

Note: You’ll want to make sure that you correctly note the oldest transaction that did import so that you don’t duplicate transactions when you manually import. You’ll also need to download your transactions directly from your bank website since that will be the file you’ll use when you’re walking through the upload process.

If you need transactions prior to the oldest imported date, there’s no need to worry, you can:

1. Go to your bank transactions 
2. Choose the account you want to import transactions to
3. Find the Link Account dropdown 
4. Choose the Upload from File option

From here you can just follow the prompts to import those older transactions.

It’s also worth pointing out that if you don’t see your bank when you try to import your transactions, you can still use the manual upload method to get your transactions into your QuickBooks account. 

You can check out the full steps on how to do this by checking out the following article: Manually upload transactions into QuickBooks Online

Banking Rules and Transaction Review

Whether your transactions are imported manually or automatically, you’ll find that both methods are easy and effective. Once your transactions are flowing into QuickBooks, you can set up Banking Rules to make categorizing them a breeze. 

1. Under your Banking tabs you can choose Rules

2. Then select New Rule to get the process started

The more the rules are used, the more accurate they will become!

You can also manually categorize and match your transactions by using the For Review tab in your Banking section. Here you can both assign your transactions to the appropriate categories, as well as match them up to existing entries in QuickBooks, such as invoices, to keep your books as accurate as possible.

For more info on setting up your banking rules and categorizing your banking transactions, make sure to check out the steps listed here.  

Reconciliation

Reconciling is the fun part where you get to see your transaction management all come together. It is a crucial step for ensuring that your balance at the end of the month correctly lines up with the opening balance of the following month. Reconciling on a monthly basis makes it super easy to identify any balance issues and locate the transactions that are causing the issues without having to sort through multiple months of business at one time.

When you’re ready to reconcile, simply follow these steps:

1. Verify that all of your transactions are correctly categorized and matched

2. Go to Settings > Reconcile > and select the account you want to review

3. Confirm that your opening balance is correct

4. Enter your closing date and balance as it appears on your bank statement

5. Click Start Reconciling

5. Compare your transactions in QuickBooks to those on your statement and put a checkmark next to the ones that match.

6. Once all of the transactions are reviewed and the difference is equal to $0, click Finish Now

For detailed steps on setting your opening balance as well as the reconciliation process, you can refer to this article: Reconcile an account in QuickBooks Online. And for a visual reference check out this video:  Quick Help with an Expert: Reconcile. 

Note: There is no need to worry if there’s a difference in the balances. You may just need to remove transactions that aren’t on your statement, combine them, or look for any that are missing. There might be discrepancies due to banking fees, but these can be accounted for as Bank Deposits in QuickBooks Online that can be added in QuickBooks as Bank Deposits.  

Post Reconciliation

Once your reconciliation difference is at $0 and you’re done reconciling, you can keep track of your completed reconciliations by running reconciliation reports. This can be done by:

1. Navigating to your Reports tab 

2. And choosing Banking and Previous Reconciliations.

If you need to edit a transaction from a previous reconciliation, you can go to your chart of accounts and view the appropriate register. You should see a checkmark next to the transaction in question that marks it as reconciled. From here, you can select the box with the R until it is blank to unreconciled the transaction. Once you hit save, the transaction will be successfully removed from the reconciliation. If your accounts are showing as imbalanced after making any adjustments, we recommend that you reach out to an accountant for the next steps to prevent further discrepancies.

Additional Resources

For additional information on the reconciliation process, check out the links below.

• Quick Help with an Expert: Reconcile 
• How to Reconcile Your Accounts with QuickBooks Online
• Fix issues the first time you reconcile an account in QuickBooks Online

That’s all we have to share with you today! We hope you found this information helpful and feel a bit more confident managing your transactions within QuickBooks Online. 

If you haven’t already joined us for one of these events, make sure to do so for our next one by following us on our QBCares X page.

See you next time!