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Here we are in QuickBooks desktop get great guitars practice by we started up in a prior presentation going to the setup process we do every time maximize the home page in the view drop down we got the hide icon bar open windows list checked off open windows open on the left reports drop down company and financial profit and loss the good old P and L change in the range for the first two months 010123 to 022823 let's also break that down to a month by month comparison hitting the total bringing that to the months customizing it fonts and numbers changing the font bringing it up to 14 ok yes ok reports drop down company and financial this time the balance sheet customize it from 010123 to 022823 let's break that out to the month by month comparison to fonts numbers changing them to 14 ok yes ok there's the setup process we go through every time we're finalizing completing wrapping up the month to bank reconciliation this being the bank balance as of the end of February by go to the banking drop down we go to the reconciled we entered our data here checking account to 02823 there's the beginning balance there's the ending balance let's continue in prior presentations we then matched this out to the bank statements this is the reconciling process so if I look at the bank statement we have summarized in essence our summary up top there's the 61 241 that matches here that's our beginning balance we got the 51 981 20 which is represented there we then have the 11 633 which is represented here so I'm going to make that green and that means our cleared balance must match out it must work that's the 101 590 05 that then is represented here so there's the 101 590 05 that's what's on the bank statement as of the cutoff date that however is not our ending balance on the books which we saw is on the balance sheet at 95 259 07 the difference between the two back to the reconciliation represented by those items that we entered into the system but did not check off those are going to be the reconciling items known as outstanding checks and outstanding deposits so now we're going to create the reconciliation report and just take a look at that report note if this is not 0 then you don't really want to go forward you want to make it 0 and if your beginning balance is matching out then you should be able to take and tie everything off and get that to 0 it has to work if there's something on the bank statement that's different than what's on your book determine if the bank statement is wrong which isn't normally the case and if it's right then you got to fix your books and if you do that then you should be able to get in balance here you could force it to work meaning if it wasn't in balance and you said reconcile you could say enter the adjustment forcing it to reconcile but if for example I was looking at a quick books account that that forced reconciliations my confidence level in the accuracy of those books goes way down so it's a huge internal control to do the reconciliations okay that said let's unclick that let's get back down to 0 let's reconcile note also as you reconcile you might have less of an ability to get access to the prior bank reconciliation that you did in our case in January because the reconciliations are unlike other reports in that they're not being created as we enter data you can't really change them after you change data and therefore they're more like a static type of report so you want to print out the reports once you make them so I'm gonna say we have the same options we saw in month one summary detail or both if you're gonna pick one or the other pick the detail even though it's overwhelming with too much detail it has what you need the summary does not because it does not expand on outstanding checks and deposits let's take a look at them and I'm gonna say okay now when you first open it up the report looks like other reports in its formatting when you go back into it after closing it from before then it might look more like a PDF file so it's a little bit strange in that way as well let's first look about the summary report I'll customize it fontine numbering it and change the font let's bring it on oh to 14 let's say 14 is good enough okay yes boom bam let's go ahead and unexpand them or collapse them unexpand or collapse so we've got the clear transaction that that just represents the items that are mirroring what's on the bank statement so the 61 241 the 11 633 the 51 981 and the 40 383 4820 then should match bank statement activity 61 241 51 981 11 633 101 590 0 5 so there it is now that isn't really necessary because we already have the bank statement that's just kind of telling us what we checked off which should match what's on the bank statement which means our cleared balance should match the bank balance that in essence is our bank balance in other words this is where the bank wreck really kind of starts in my opinion you've got that number and then the unclear items which represent the outstanding checks and deposits giving us the exact difference the reconciling amounts to then get to the register balance at 95 to 5907 that amount matching what's on the balance sheet 95 to 5907 that's why it's a reconciliation people that's it and then so that's the bank reconciliation from here to here however it doesn't give us the detail on the checks it doesn't give us the detail on the deposit so I can't really check the month after February and March for example to see if those items have cleared the bank because I don't have the detail so if you give this report say to an auditor or something like that you might say well the auditor wants a bank wreck you give them the summary they're not gonna like it they're gonna say it's not enough I don't have the detail you just told me the seven items how do I know you didn't make that up how do I know that those are legitimate items how could I double check on those items so although the summary reconciliation is nice to look at for ease of looking at it it doesn't have the detail now we don't have the transactions afterward this time because we only entered transactions for two months but it also enters or would have if we had transactions in March added detail which in my opinion generally unnecessary then we can go to the to the other reconciliation the detail and let's customize it to and bring it on up to 14 as well okay yes okay and it's got the same stuff but as you might expect it has more detail in it with the detail report includes details so now we've got the cleared balance which has all the cleared stuff which once again just matches what's on the bank statement because we checked all that stuff off so it's somewhat redundant what we're really looking for is there's the start of the bank sec reconciliation that's the bank balance in essence 101 590 05 the 101 9505 and then we've got the unclear stuff which represents the the check forms the decreases which now labels each of those items so now this is what I want because now I can kind of compare this to to whether they cleared in March that's what I need to know if I was an auditor I would want to know exactly what these checks are and verify them to make sure that you know you wouldn't make up those checks and whatnot and then we got the two deposits and that's the difference that reconciles us from the bank balance to the book balance now just a quick look notice if we compare the prior bank statement we of course have a nice rollover of the ending balance of January being the beginning balance of February and then everything cleared out on both January and February if we take a look at the prior month reconciliation we would expect then the unclear items which are going to be these checks the ones that we didn't check off that were written in January but didn't clear the bank in January to then clear in February so if I if I look at that fight that 108 the 110 the 115 and I go into the February bank rec in the cleared items we've got the the items that were in January here's the here's one that was written in January that cleared in February this was written in January cleared in February remember that these dates that we entered them into the system will differ than what's on the book so this 1014 for example will differ than what's on the bank statement is the 1014 cleared in February even though we wrote it in January I think I got that little backwards sorry about that we wrote it here in January it cleared in February as we are looking at the February bank reconciliation so that's how those two things are kind of connected up it can be a little bit confusing to think about how that how that works because we've got the cleared balance that cleared last time that the system knows that's included in our beginning balance and then when we do the future bank reconciliation for example when I do the bank reconciliation for March next month we're gonna have the cleared balance which which is represented by this number and everything that we checked off in QuickBooks this is the bank statement which is also on QuickBooks representing the cleared balance the system knows that because we checked them off even though that's different then of course what's on the the actual books here on the balance sheet 95 to 5907 as of February okay so that's the detail report also note that you're gonna want want to be printing these items out because these reports will not be the same kind of reports in other words if I go to the reports drop down into the banking you can see down here it says previous reconciliation and that would give an indication that you might have some trouble going back to the reconciliation five months ago and part of that is because the reconciliations in QuickBooks are going to you know they're gonna be based on the work that you did to reconcile not just the data input work they're not being built just by your data input but by the process of reconciling and if you deleted something that you had reconciled before or was on the bank reconciliation then QuickBooks doesn't really have a way to account for that or adjust the reconciliation so you want to have a static report printed out so that if something gets messed up you can then compare what you had reconciled before to whatever had been deleted or whatever in the future so I'm gonna print this out I'm gonna print it and say file save as a PDF I also want to just show you that if I close this and go back into it that it might open like a PDF type of format so I'm gonna open this up and I'm gonna say that this is gonna go into my QuickBooks desktop and I'm gonna just call it let's just put it right here this will be this will be bank rec in February so this is the bank rec for February I'll say save it so we have that now note that when you open it up like when you save this one let me just show you that I know something I noticed that when you save these sometimes it'll open it up kind of not in an ideal fashion you could see it's going the wrong way bank February so this one looks right this one actually opened up vertically or in a portrait format but if I open this one up I think it's because I had expanded it it made it landscape and then it oriented it this way so if you want to change that orientation to kind of turn it around one way to do that one way to see it that way as you can you can file and I'm gonna say I'm gonna open it up I want to open it in like a browser window and so now you're gonna open it up this way and then you have the capacity to rotate it so you can you can rotate your reports just just to note that idea or that option then I'm gonna close this back out I'm gonna close this out I'm going to then close this one and then if I go into the reports again and try to open them back up accounting let's go to the banking previous reconciliation just to show what it looks like here I'll look at the detailed report and display then notice it doesn't show up in the same format it opens what looks kind of more like a PDF file within QuickBooks so if it if your report looks like that don't be surprised about that because again the reports for the bank rex are a little bit wonky a little bit different than the other reports due to the nature of them so I'll also just want to check the register while we're here we're gonna go to the banking use register and I'll open up the checking register notice these items that are checked off now are represented that they're cleared before they were clear they were little asterisks when we had them checked off but we haven't finalized the reconciliation now they're checked off as cleared if you're gonna delete anything any prior period transaction and it was you know you got to be careful about what's gonna happen with your reconciliations and whatnot in future periods so if there are unclear checks and you need to avoid them in the future or something like that or then you want to be again careful about how you're going to do that so you don't mess up prior period transactions all right so that's the general idea there's the bank reconciliations let's just open up the trial balance to see where we stand at this point in time we made a couple adjustments during our process here with the withdrawals I believe and the bank service charges so let's run this from 010123 to 123123 this is where we stand I'll customize it with the fontine and the numbering bringing the font up to let's say 16 this time okay yes and okay this is where we stand these are the two legs of the debit and credit that we're standing on and you can check them out and see if your legs match these legs and if they do great if not then try to change the dates it's often a date range issue