Reconcile the bank account each month

Reconciling checks the books against the bank statement. You tick off each entry the bank shows. When the ticked entries add up to the statement's balance, the books and the bank agree. Anything left unticked is still on its way, like a cheque the person hasn't cashed yet.

Do it every month, when the statement arrives. It catches mistakes and missing entries while they're easy to find, and the auditor will ask for it.

Steps

1. Have the bank statement in front of you, on paper or on screen.
2. Open Books, then the books, then press Reconcile.
3. Under Start a reconciliation, choose the Account, for example 1000 Bank: chequing.
4. Choose the Statement end date and type the Balance at the end of the statement, exactly as the statement shows it.
5. Press Start reconciling. If you've brought in the bank's file and sorted it, everything on it is ticked already (marked On the bank file). See Bring in your bank's file and sort it.
6. Go down the statement line by line. For each one, tick the matching entry in Deposits and other money in or Cheques, payments and other money out.
7. Watch the Difference at the bottom. When it reaches $0.00, it says The books agree with the statement: ready to finish.
8. Press Finish the reconciliation.

To stop part-way, press Save and finish later. Your ticks are kept, and Carry on takes you back.

Have AI prepare it

If your owner has turned on AI help with the books (see AI help with the books), AI can do the comparing for you. You still check everything and finish it yourself.

1. Open the reconciliation and press Have AI prepare this.
2. If this statement's transactions didn't come in from a bank file or feed, choose the statement PDF under Statement PDF.
3. Press Have AI prepare this. It takes a minute or so.
4. Under AI's suggestions, read what it found.
5. Press Tick what AI suggests. Each entry it suggested is marked AI, with its reason. Check each against the statement and untick any that aren't on it.
6. For each entry it says is missing, like a bank fee, check the account and amount, then press Make this entry. The entry is made and ticked.
7. When the difference is $0.00, press Finish the reconciliation.

To ignore its suggestions, press Set these suggestions aside. Either way, what AI suggested and what you did with it are kept for the auditor.

When the difference isn't zero

Work through these in order:

• Something on the statement isn't in the books, such as a bank fee, interest, or an automatic payment. Make the entry (see Make an entry in the books), then press Carry on and tick it.
• An amount is different, for example $45.00 in the books but $54.00 at the bank. Look at the cheque or deposit slip. If the books are wrong, reverse the entry and make it again (see Correct a mistake in an entry).
• Something is ticked that isn't on the statement. Untick it.
• The statement balance was typed wrong. Open Change the statement and correct it.
• A difference that's exactly twice an amount usually means a deposit was entered as money out, or the other way round.

The finished reconciliation

Once finished, the page shows:

• the balance on the statement;
• deposits not in the bank yet, and cheques and payments not cashed yet;
• the balance in the books on the statement date.

Print it for the treasurer's file or the auditor. Anything not cashed yet carries into next month's list, ready to tick when it clears.

A cheque still not cashed after six months is usually stale, and the bank won't accept it. Ask the person about it. If it's cancelled, reverse it. If the money is still owed to them, ask your accountant which account to record it in until it's paid.

Credit cards and loans

Reconcile a credit card the same way, choosing its account under liabilities. Type the balance owed on the statement. The lists are Charges and other amounts added and Payments and credits.

Good to know

• Owners, treasurers, bookkeepers and accountants can reconcile. Auditors can read finished reconciliations.
• Tick what's on the bank file ticks exactly what the bank's file shows, if you've changed the ticks and want to start again.
• Tick everything helps with the first reconciliation of books brought in from QuickBooks: tick everything, then untick what isn't on the statement.
• Only one reconciliation per account can be started at a time, and each statement comes after the last one finished.
• A finished reconciliation can't be changed. If something was ticked by mistake, an owner, treasurer or accountant can open Reopen this reconciliation on the latest one, say why, fix the ticks and finish it again. The reason is kept.
• Reconciling never changes an entry; it only marks which ones the bank has cleared.