Small business and QuickBooks: Did you reconcile?
Love it or hate it, most small business owners are using QuickBooks to track their company’s finances. I’ve found that many people, while using QuickBooks to enter transactions, fail to follow through to ensure they are are getting everything entered. If you get to the end of the year with a bunch of missing transactions, it is going to be that much harder to track down the reason why your checking balance and your QuickBooks balance are worlds apart.
Before I give the basic how-to of reconciling in QuickBooks, let’s establish some ground rules:
1. A bill, such as phone, electricity, Internet, car payment, etc. is entered as a bill within QuickBooks. When the bill is paid, you are using the Enter Bills/Pay Bills feature.
2. Money received is entered either using the Sales Receipt or Create Invoice/Receive Payments feature.
3. Deposits are made from undeposited funds by using the Record Deposits feature.
4. Purchases made using your debit card are entered into the check register directly or by using the Write Checks or Enter Bills/Pay Bills feature.
If you are following the above on a daily/weekly basis, then reconciling your account should only take a few minutes of your time and should be very easy.
1. Click Banking > Reconcile
2. Ensure that the beginning balance is the same as the beginning balance on your bank statement.
3. Enter the statement date.
4. Enter the ending balance.
5. Check off each of the deposits and credits that appear on your bank statement. If you missed a deposit, go back to home and record the deposit.
6. Check off each of the checks and payments that appear on your bank statement. If you missed entering a purchase, payment, or check, go back to banking and do it now. Change the amount of any item by double clicking and editing.
7. The amount in the lower right hand corner should be zero. Print (to a printer or to adobe pdf) a reconciliation report to be filed.
By doing this each and every month, you are taking a proactive approach toward your finances. You will spend less money on your accountant at tax time, you will enjoy a feeling of better control, and you will have an easier time using QuickBooks’ more advanced features.
AccountingWEB would like to thank Maine Accounting  for providing this article.