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Company owners sometimes ask me:  “Should balance adjustments arising from account reconciliation problems cause me any concern?” 

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Do QuickBooks Account Reconciliation Discrepancies Matter?

In my experience and opinion, accounts should reconcile – right down to the penny – almost all of the time! Account reconciliation is paramount; here’s why…

The account reconciliation process is just a large matching game between what you have on your books and what the bank statement shows. And you want to be sure that you and your bank agree! (If not, you may be in for some unpleasant surprises…)

The QuickBooks Account Reconciliation Process

1. First, you click off all matching (cleared) checks and deposits in your QuickBooks reconciliation screen that you see on your bank statement.
2. Then you record transactions shown by the bank not yet on your books. They will now appear in your reconciliation screen.
3. Check off the new matching transactions in the reconciliation screen. (This is critical if you want a successful account reconciliation.)
4. Finally, review the non-matching (outstanding) items on your books, such as checks and deposits not yet cleared by the bank.
   (Ask yourself, “Is it reasonable that they haven’t cleared yet?”)
5. When the cleared balance on your books equals the bank ending balance (i.e., when the difference is $0.00), you’re reconciled!

Clearing Up QuickBooks Reconciliation Discrepancies

Once or twice a year, if you have a large number of transactions clearing the account and you’re “off” by a small amount (e.g., between $.01 to $5 total), in the interest of using your time effectively, it’s acceptable to post an entry to an account such as Miscellaneous Office Expense for that small unreconciled difference to help with account reconciliation.

If, however, you find that your accounting assistant regularly has small, unresolved differences, be vigilant and let him or her know that you are reviewing the account reconciliation closely.  Of course, follow up immediately if you see any large, unresolved differences!

If you liked this blog, you’ll enjoy this one as well.

Regards – Diane