Reconciliations

Credit Card Reconciliation Process

• Objective: Step-by-step reconciliation of a credit card account using QuickBooks Online (QBO).

Introduction to Reconciliation

• Definition of Reconciliation: The process of matching and comparing transactions in accounting systems against external records (such as bank statements) to ensure accuracy.

• Resources: A downloadable credit card statement is available (link provided) for practical reconciliation.

Accessing the Reconciliation Screen

1. Navigation Steps:

   • Open the Accounting app.

   • Select Reconcile.

   • Close additional pop-ups or distractions to better view the reconciliation tools.

2. New AI-Powered Reconciliation Experience:

   • QBO now offers an AI tool to assist in reconciliation.

   • Functionality: Users can upload PDF outputs of bank statements, and the AI populates data fields, such as:

     • Statement ending balance

     • Statement ending date

     • Transactions that have cleared during the statement's period.

   • Caveat: Human review is still required, ensuring the accuracy of transactions.

   • For the purpose of this training, this AI feature is not utilized.

Starting the Reconciliation Process

Inputting Statement Data

• Credit Card Account Example:

  • Locate the Amex credit card statement:

  • Ending Balance: $6,009.38

  • Ending Date: 08/24/2025

  • Input these details into the reconciliation screen:

  • Ending Balance Input: Enter as 6009.38

  • Ending Date Input: Enter as 08/24/2025

  • Beginning Balance: Set to Zero (for a new account).

QBO Calculation Overview

• QBO processes the reconciliation by:

  • Starting with the entered ending balance.

  • Calculating the cleared balance after validating transactions against the bank statement.

  • Displays two primary columns for tracking:

  • Charged Items (what has been charged to the account).

  • Payment Transactions (what payments have been made).

Monitoring Cleared Transactions

• Observation:

  • As transactions are selected (checked off), the application updates the adjusted balance dynamically.

  • Understanding Cleared Status:

  • A transaction is marked as cleared when it has been processed by the bank (indicated by checking off).

  • The objective of the reconciliation is to achieve a zero difference in the calculation of entered balances versus cleared balances.

  • If discrepancies arise:

  • Uncheck any incorrectly selected items.

  • Corrections (like unchecking a payment that appears before the statement’s period) may be needed.

Adjusting Reconciliation Information

• Options for data adjustment include:

  • Editing ending balance or ending date if entered incorrectly.

  • Saving the progress for later adjustments.

Results of Completion

• Upon finishing reconciliation:

  • QBO confirms whether reconciled successfully with a message that indicates nothing outstanding remains.

  • Option available to pay the credit card (but generally not used as payments typically occur online).

Moving on to Other Accounts

Reconciliation of the Savings Account

• Account Example: Reconcile a savings account.

• Statement Information:

  • Ending Balance: $1,000

  • Ending Date: 08/31/2025

• Steps:

  • Set the Beginning Balance to zero and input the statement details and proceed to reconcile.

  • Confirmation of zero difference indicates successful reconciliation completion.

Initiating Checking Account Reconciliation

1. Accessing Reconcilation:

   • Select the Checking account.

2. Input Statement Data:

   • Ending Balance: $48.09

   • Ending Date: 08/31/2025

3. Reconciliation Execution:

   • Observe automatic transaction selection and zero difference summary.

Troubleshooting Differences in Reconciliation

• If discrepancies occur during reconciling:

  • Investigate potential duplicate transactions and make required adjustments.

  • Add any missing transactions that did not clear during the bank feed.

• Methodology for Investigation:

  • Cross-reference the payments and deposits with the bank statement for accuracy.