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Salessio0564
July 23, 2024
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Reconciling bank accounts

  • July 23, 2024
  • 1 reply
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I have a client whose bank activity hasn’t been reconciled since 2019. I want to get the client caught up for 2023-2024. The ending balance doesn’t match the bank statement as of 12/31/22. Should I make a journal entry to the checking account and offset it against retained earnings as of 1/1/23 to match the bank balance in order to start reconciling 2023?

Best answer by Rea_M

Thanks for the recommendation. I completed a reconciliation from the last time it was done, 7/2019 to 3/2023. I started the reconciliation from beginning balance in 7/2019 and entered ending balance from bank on 1/31/2023. The bank is reconciled, however the check register isn’t tying to bank balance. My difference is around $27,000! So I compared what was on the register from 2019 to mid 2021 and found duplicate transactions, mostly from credit card payments.  I assume that the months ahead have similar discrepancies. In the matter of saving time, should I make a journal entry to adjust the balance in 2023 because these differences are prior to 2023? 


Yes, you can save time by creating a journal entry to adjust your account balance, Salessio0564. But before doing so, I have recommendations for you to manage your financial data.

 

Entering a journal entry is a faster way to adjust the discrepancy in your account balance. However, it's a complex task, so I'd recommend consulting your accountant to prevent book inconsistencies.

 

Alternatively, you can review the Reconciliation report from the previous reconciliation to confirm the duplicate credit card payments. Once verified, you can delete them manually. But, I'd still encourage you to reach out to your accountant for further guidance.

 

Once everything is all set, continue reconciling your account.

 

Additionally, in case you need further guidance in performing and rectifying a reconciliation in QuickBooks Online (QBO), check out this article: The reconcile workflow in QuickBooks.

 

I'll keep this thread open so you can comment on any other reconciliation concerns. We're always ready to help you out.

1 reply

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James_AL
July 23, 2024

Thanks for visiting the Community, Salessio0564.

 

Reconciling several years of bank activity can be quite a task. Since the bank hasn't reconciled for years, I recommend reconciling it one year at a time until the current year's (2024) reconciliation. This way, all adjustments you enter during the reconciliation process will apply to the year those transactions occurred.

 

When you receive your bank statement, it's important to check each transaction against the ones recorded in QuickBooks. If they match, your accounts are balanced and accurate. Thus we suggest reconciling your checking, savings, and credit card accounts every month.

 

Just in case, here's an article with a step-by-step guide on how to reconcile an account in QuickBooks Online.

 

I'm also adding this article if you have a problem with your reconciliation: Fix issues at the end of a reconciliation in QuickBooks Online.

 

Please keep me updated if you have any more questions about reconciling. Have a great day!

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Salessio0564Author
July 23, 2024

Thanks for responding. Since it is difficult to get these statements from prior years, wouldn’t an adjusting journal entry to the bank and retained earnings get it caught up to move forward with the current year reconciliations? 

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SashaMC
July 23, 2024

Hello Salessio0564,

 

Thanks for chiming in! However, for questions like this, we often recommend that you speak with an accountant to see what would be the best fit for your business. If you don't have an accountant, feel free to use our ProAdvisor service to connect with an expert in your area. Many even offer a free consultation. Please use the link below.

 

 

If you have any other questions or concerns, let us know! We are here. See you soon.

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