Karen Cook
Karen Cook
Optimizing the Reconciliation Report

Optimizing the Reconciliation Report

Monthly reconciliations of bank accounts, credit cards, and even loans serve many purposes.   Reconciliations ensure that the transactions entered into your bookkeeping software, such as QuickBooks, match the actual transactions that happened at your financial institution.   At the completion of a reconciliation, once you have a $0 discrepancy between deposits and expenses, a Reconciliation Report is produced.  This report is a valuable tool to keep your financial books clean and your financial reports accurate.

Reconciliation Reports usually start with a Summary section that shows a Starting Balance, Expenses that cleared, Deposits that cleared, and an Ending Balance.  They then usually list each Expense and Deposit transaction that cleared the financial institution during that period.  Finally, towards the bottom of the report is a section that lists transactions that did not clear the bank.  This is where you want to ask yourself the question, “Why does my QuickBooks think this transaction occurred, but my bank does not?”

Possible reasons for the un-reconciled transactions include:

  • The transaction occurred after the reconciliation range of dates.  (Reconciled for the month of March, but the transaction happened in April).  That is fine, you will clear those transactions when you do April Reconciliation.
  • The transaction is a duplicate.  For example, the electricity payment was entered twice.
  • The transaction was entered but will never clear the bank.  Perhaps you wrote a check and then had to rewrite it for a different amount or you entered a personal credit card charge in a business account by mistake.

Looking at the un-reconciled transactions can also expose inadvertent mistakes or bad bookkeeping habits such as Bank Feed mistakes or booking a loan set up/purchase/sale incorrectly.

It is extremely important to note that Transactions in previous months or years MUST be corrected in the current month.  Do NOT touch transactions (adding, changing, deleting) from previous months or years.  If you need to correct something from a previous month or year, speak with your accountant.  The bookkeepers at ADKF are happy to help you make adjustments to clean those out in a way that does not impact your previous financials.

Please remember to consult your tax professional for tax implications if the past extra transactions are significant.

Regular reconciliations of your accounts are a good practice for catching errors. Cleaning up all unreconciled transactions before your financials are sent for tax preparation ensure that you are properly reporting your business financials.  ADKF bookkeepers can provide both training and assistance with regular maintenance of your financial books.

is the largest, locally owned public accounting firm in San Antonio, Texas, with branch offices in Boerne and New Braunfels. We have been serving our community since 1991. We are a full-service CPA firm dedicated to providing a broad range of tax, audit, bookkeeping, tax controversy, and consulting services with superior customer service to help our clients meet their goals and objectives. Please click here to set an appointment with us.

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