When you reconcile an account, you compare the beginning balance and transactions listed in your QuickBooks Online company file with your monthly bank or credit card statements to make sure they match.Accountants call this reconciling, or balancing, your books. When you're finished, your books and bank agree with each other.
Reconciling is like balancing a chequebook, as you review your bank statement to make sure it matches the amounts you recorded in your transaction register.This lets you know your available balance for the period and identify any discrepancies (such as unrecognised charges).
Reasons for monthly reconciliations:
- Lets you know your books are correct
- Enables your accountant to give you better advice
- Makes tax time much easier for yourself
- Lets you know if your customers are paying you
- Lets you see if you're paying your own bills on time to avoid late fees and unhappy suppliers
By reconciling your accounts monthly, you can:
- Quickly spot income fluctuations and respond accordingly
- Take quick, informed, and decisive action when you see financial opportunities or possible danger signs
- Catch bank errors that cost you money, like a wrong total for a deposit with multiple cheques
- Help prevent possible fraud by employees, accounting professionals, or suppliers
Learn how to reconcile
Ready to get started? See Reconcile an account for more information.