How To Process Bank Reconciliations in QuickBooks Online

hi this is Tim yod with fit small business today I'm going to teach you how to reconcile your bank account in QuickBooks Online this is one of our free 46 QuickBooks Online tutorials that you can find by Googling fit small business QuickBooks Online tutorials so let's get started at our QuickBooks dashboard so in order to do a bank reconciliation there's several ways you can get to it I like to go to accounting reconcile okay let's reconcile our business checking account okay and so this brings us our beginning balance now I've made a sample bank statement that we're going to use so just a very simple B bank statement our beginning our beginning balance matches and now we want to enter our ending balance which is 8,655 94 so this comes from your bank statement and our ending date is October 20th okay so let's start reconciling okay so up top here it's going to show you your statement ending date plus and minus anything that you mark as being cleared and that gives you your cleared balance okay so um let's go through here and let's close the screen so we can see now we're going to trace our transactions from this screen oh so okay we've we've transferred all of these transactions over from our uh bank account in our electronic uh Bank feed so it automatically marks them as being cleared I don't like that that's confusing I like to do it all manually okay so I'm going to unselect them and good um so okay so let's Trace from these transactions to our bank statement so we have a utility bill from Verizon of 36357 yes there's the 36357 if it was a piece of paper I'd put a check mark on it here I'm just going to put a one next to it that means that we've traced it so 36357 now we have these Bank fees so we have a bank fee and then sales tax on the bank fee and then they were waved so 745 and 45 cents we're going to trace all four of these at the same time over to our bank statement and here we see them okay we have a $75 check number 5021 check 5250 21 is 29425 well that's wrong isn't it so let's flip back here we see here 29425 is actually check 5022 so we can do some investigation find figure out which is right well here let's say our bank statement is right right so that's actually check 5021 so we can go in here open this check and we can actually change the check number to 5021 to match our bank statement because our books were incorrect now it's telling us we already have another check 521 do you want to save it anyway yes now we know this 5021 is incorrect so we can go in here and let's just put a question mark after it I don't know if it'll allow us to do that okay there we go so this is a good example of as you're doing your bank reconciliation you don't need to leave the reconciliation to make changes okay we were able to correct this Bank uh this check number based on our bank statement and now we can clear it so 29425 come over here 29425 okay um the $75 let's go over here and the $75 doesn't show up here which isn't surprising for a check right this is a paper check and so the paper check just hasn't cleared the bank yet and so it's going to be an outstanding check so not going to check it off okay we have a deposit of 12250 and a deposit of 1212 so let's go over here a deposit of 1212 and a deposit of 1250 very good so those are both there we can check them off as cleared okay and now we have a an expense of 10921 let's go over here 10921 okay so go back here this is marked off okay so we can go we can see that everything in our QuickBooks is on our bank statement except for this one paper check which is fine it's a paper check it's probably just hasn't been uh deposited by the vendor yet and made it to our bank so this is fine everything looks good here now let's Trace from our bank state statement back to QuickBooks and here we can see all of these have been ticked off except for this automatic insurance payment on October 1st so we can add that automatic insurance payment right that cleared up bank it's not in QuickBooks that's the problem we need to enter it in QuickBooks so Insurance expense of 15321 okay so can we add a transaction here I don't see a way to add a brand new transaction so what I'm going to do is I'm going to click on expense I'm actually just going to hover over expense and then go to expenses and I'm going to rightclick and open a new tab so you don't have to you can have multiple tabs open in QuickBooks online at the same time that's a nice little timesaver okay so let's add a new expense for this insurance bill not sure we have a vendor yet for insurance uh let's just call it New York City Insurance okay can comes out of business checking that's good um the the payment date was October 1st according to the bank okay and it was automatic withdrawal um category let's just call it Insurance okay and let's select the class as admin because in our settings we've chosen to always track classes for all expenses okay so we can do save and close okay now let's go back switch tabs back to our reconciliation and now we'll have to refresh the screen in order for the effect to take the change to take effect now we should show that transaction is being uncleared yes we do here is the oh I think I forgot to put an amount in there so the pay the amount should be 15321 so we can modify that right here let's just click on it 153 21 save and now we can click it here go back to our statement 15321 Market is cleared on our statement and there we go we can see our difference is zero so our ending statement balance is 865 94 and then we have our beginning balance minus the six payments that we've showed is cleared here plus the four deposits we've shown as cleared here equals our cleared balance our statement ending balance equals our cleared balance so that is great okay so we are reconciled notice this one account this one transaction that's not cleared that's our outstanding check that's going to show up next month as an outstanding transaction and the same list of transactions will mark it off when it clears next month okay so let's go ahead and finish our reconciliation you have reconciled the re the account we can view our Reconciliation Report okay shows all of the expenses that cleared all of the deposit that cleared and then it shows this uncleared check of $75 commonly called an outstanding check of $75 so you want to keep an eye on these outstanding these un these uh uncleared checks because if you get a check that ends up being you know N9 months old and it's never cleared you might want to follow up with that vendor see if the check got lost maybe you have to issue a new check um something like that but this is only this is only a few days this was only written four days before the statement date so it's not surprising that it hasn't cleared cleared the bank yet okay so you can print that if you'd like and that is how you reconcile your checking account in QuickBooks online please check out our other 46 free tutorials by Googling fit small business QuickBooks Online tutorials

This transcript was generated automatically from the video's captions and may contain errors.