How to Reconcile in QuickBooks Online

 

If you’re just getting started with a new accounting solution like QuickBooks Online, there’s a lot to learn. You’ll need to understand how to set up your account, create invoices, track expenses, and more. You’ll also quickly find that there are certain features which QuickBooks lacks, but which you can access via various QuickBooks Online third party app integrations.

Of all the tasks you’ll need to perform within QuickBooks, though, one of the most essential is reconciling your accounts. Keeping your accounts up to date is the only way to ensure that you stay within budget and understand exactly how much cash your business has on hand at any given moment.

Years ago, reconciling multiple accounts was a huge time sink. Now, with the help of automatic transaction syncing between your various bank accounts and QuickBooks Online account, reconciling can be accomplished much more quickly.

What is account reconciling, and why is it important? How do you reconcile your accounts in QuickBooks Online? And once your accounts are reconciled, is there anything you can do to get your outstanding invoices -- that is, upcoming and past due payments that haven’t yet posted to your account -- paid faster? We’ll answer all of these questions below in our latest QuickBooks Tutorial Series blog post.

What is reconciling?

Simply put, reconciliation is the process of matching the transactions from your various bank and credit card accounts to the transactions posted in QuickBooks Online.

As mentioned above, it used to be common practice to go through your monthly bank statement and manually enter transactions into your accounting software (or, even longer ago, into your physical ledger).

To simplify this process, though, you can connect your online bank accounts and credit card accounts to QuickBooks Online. Transactions that post to these accounts are automatically sent to your QBO account as well, resulting in a pre-populated list of purchases and deposits in your QBO transaction register.

Why is reconciling my accounts important?

While the data import from your various accounts into QuickBooks is likely to be very accurate, it’s not foolproof. You’ll want to reconcile your accounts with your QuickBooks transaction register on a regular basis to ensure that your QuickBooks data is up to date.

Without a properly reconciled transaction history, there’s no way to know whether any financial reports you generate are accurate. If you want to be certain about your cumulative account balances, you’ll need to reconcile your accounts.

How do I reconcile in QuickBooks Online?

Reconciling in QuickBooks Online is fairly straightforward.

First, sign into your QBO account and select Accounting from the navigation bar. Next, click on the Reconcile tab.

You’ll be presented with the option to choose which account you want to reconcile. It’s important to make sure that you go through each and every account individually, rather than only reconciling one of your accounts. (If you only have one account -- for example, a checking account -- then you’ll only need to worry about reconciling that account.)

Below the account selection drop down menu, enter the ending balance from the bank statement you’re referencing as well as the ending date associated with the statement.

Now, it’s time to start reconciling. Go through all of your expenditures listed under the Checks and Payments heading in QuickBooks. Match each of these transactions to the corresponding transaction on your bank statement. If the two are identical, click the checkbox next to the transaction in QuickBooks.

When you’re done, the Difference heading at the bottom of the Reconcile screen in QuickBooks Online should read $0.00.

If there’s a balance remaining, don’t panic. A number of common scenarios might be to blame. These include service charges from your bank, checks that still need to clear the bank (but which have already been entered into QuickBooks), and bank transactions which have failed to sync with QuickBooks. Look through your statement for these anomalies and account for them as needed.

Collecting Payment on Outstanding Invoices

The act of reconciling your accounts can sometimes highlight a major issue for your business: cash flow. After going through and checking off each transaction in your QuickBooks Online account, you may have noticed just how many invoices are still outstanding and unpaid.

You may be tempted to send out email reminders to customers with upcoming or overdue invoices. Email invoice reminders can be extremely effective when it comes to collecting outstanding payments. Unfortunately, though, doing this in QuickBooks is extremely time consuming. You’ll need to navigate to individual invoices and send reminders by hand, a process that’s both time consuming and imprecise.

We have good news, though. There’s a better solution for getting paid on time: Biller Genie.

With Biller Genie, you can configure automated invoice notifications, including payment due and past due email invoice reminders. You can even set up automatic late fees to encourage your customers to pay on time. Plus, your invoices are fully customizable to match your company’s brand and color scheme: no more generic QuickBooks invoices.

Biller Genie also makes reconciling even easier. When Biller Genie processes a customer payment, the corresponding QuickBooks invoice is closed automatically. We take care of the reconciliation for you -- and that means one less thing on your to-do list.

Best of all, Biller Genie is free!

Ready to get those invoices paid? Click here to sign up for your free Biller Genie account.

Tags: improve cash flow, invoicing, Payment Technology, accounting, Biller Genie, Small Business, QuickBooks Intuit App, QuickBooks Online tips, reconciling, reconcile invoices