 QuickBooks Desktop 2023 Bank Reconciliation Month Number One Deposits Let's do it with Intuitz QuickBooks Desktop 2023 Support Accounting Instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it. Here we are in QuickBooks Desktop Get Great Guitars Practice File. We started up in a prior presentation going through the setup process. We do every time maximize the homepage to the gray area view drop down hide icon bar open windows list checked off open windows open on the left reports drop down company and financial. Let's look at that P to the L and range to the change 010123 to 1230. Let's make it to 013123 for the month of January because that's when we're reconciling customize up top font in numbering change that font bring it on up to 14. Okay, yes, and okay, and the balance sheet reports drop down company and financial the big balance sheet customize it change the range from 010123 to 013123 and font in numbering changing to 14 and OK, yes, and K. That's the setup process that we have been doing every time. We're starting the bank reconciliation for the month of first month of two that we will be reconciling for this being the first reconciliation. We talked about some of unique problems to the first bank reconciliation here. Now we're going to be focusing in on the deposit side of the bank reconciliation. Remember the idea being that we want to be tying out or reconciling the balance on our books to that of the bank statement. This is our mock bank statement that we'll be working with. I'm going to close up the trial balance here and the ending balance here shows 6124185. Now we will be making changes to our books to represent anything on the bank statement that is not on our books. But even so, at the end of the day, we don't expect our books to be matching 6124185. If, and in most cases, there will be outstanding checks and outstanding deposits as we will see. So let's go back on over to QuickBooks. Go back into the bank reconciliation. I'm going to go to the banking dropdown to do so. Go into the reconcile and here's our opening up windows. You've got the checking account. It's going to be as of 13123. We have no beginning balance. That's an issue. That's a problem we talked about last time, but it's OK. We're going to move forward with it and we'll deal with that as we go. Then we got the ending balance 6124185 matching out what is on our bank statement. That looks good. I'm not going to enter service charges or interest because I don't like to do it there because it confuses things. I believe continuing on, we're going to be focusing in on checking off the deposits. Now we already checked off the 25,000, which in essence is representing our beginning balance. That's the first bank wreck kind of issue problem in that the beginning balance could have a little bit of an issue with it that we're going to have to deal with as we go. Also, that doesn't quite tie out to the 30,000 here. I could see what the difference is. I believe it's going to be these two checks that cleared that were actually written in the prior system that we talked about last time. But I'm going to be OK with that for now. We'll deal with that later. But imagine that if this amount was correct once we fix that, then if I have my additions and subtractions ticked off correctly, then the cleared balance, not the balance on our books, but the cleared balance, the ones we checked off will have to match this. So now we're going to look at the addition side, which is the 1437085, which is represented by these three deposits on the bank statement right here. Now note that when we're looking at the deposits, if everything in our bookkeeping system is done properly, the bank's reconciliation should be easy. So just a quick recap on that. If I go back on over and if I go to my homepage, note that obviously if you have a system where you're doing gig work and you're making your bank reconciliation from the deposits on the bank feeds from the bank, then of course your bank statement should tie out exactly. That'll be really easy. But in the event that you have like cash sales at a register situation or you have a full service, a cruel system, then you might have credit cards, for example, you're getting payments from and you might have cash that you're getting payments from. And in those cases, we talked about the idea that you're going to have to bundle them together and deposit them into our cash account within the books in the same bundling, the same grouping as would be shown on the bank statement. If you don't do that, then when you do the reconciliation process, you're going to have to be adding together multiple deposits in our book to match one deposit on the bank statement. For example, if I had multiple sales that I made on the sales receipt and I deposited them individually into the checking account, but when I physically made the cash deposit into the bank, I deposited them in one lump sum. Then on the bank statement, it's going to be a lump sum in our books. It's going to be a bunch of individual deposits that causes a problem that makes the reconciliation difficult. How do we fix that? We use undeposited funds and then we make sure that when we deposit in our system, it matches the same grouping on the reconciliation so we can reconcile. Same problem when you talk to credit cards or have credit card transactions, which can be a little difficult because sometimes the credit card companies are going to have some random grouping on how they group stuff and deposit it in your bank account as one lump sum. You've got to work with the credit card companies so that you can have your system mirror what the credit card company is doing, making the bank reconciliation as easy as possible. It might take a little bit of negotiation there or research on that. So if that is the case, then it should be nice and easy. We're just going to take and tie these off. So for example, also just realize that you always want to be going from the bank statement to the books. Obviously, you can go back and forth. But the reason you want to think about it as I'm looking at the bank statement and then the books is because if it's on the bank statement, it must be on our books unless the bank is wrong or unless we haven't included it, in which case we have to fix our books. If it's on our books but not on the bank statement, that doesn't necessarily mean that something is wrong. That might just mean that there's an outstanding item. So if we're going from here to here from the bank statement to the books, we should always be able to find what we're looking for. Whereas if we went the other way, we would expect sometimes we might not find what we're looking for. So that's going to be that. Also just a quick note on what you would expect to see when you see a deposit side of things. The deposits of course represent increases to the bank account. If these were deposits of cash or something like that, or even if they were checks, then sometimes you don't have that check detail unless you go in and look at the canceled check. So all you're going to have on the deposit side then is the amount and the date in those cases, which usually is sufficient because you can tie those amounts out. There's usually deposits aren't as numerous as, say, the outflows. The outflows usually have more transactions, but less dollar amount, hopefully, right? Hopefully the deposits are higher in dollar amount, but usually they're less in number of transactions. However, if you use bank feeds, so if you're using electronic transfer data, then of course you're going to have more data. Typically, you'll have the date that deposit happened as well as the electronic memo or the bank memo, which could give you some valuable information. So that's what's kind of nice about electronic transfers. On the decrease side, if you write physical checks, then you'll have the check number and you'll have the date. The date will not be as relevant because it'll take time for the check to clear. The date will be further difference. There'll be a gap between when we wrote the check and when it cleared, whereas an electronic deposit or even a normal deposit should clear quite quickly. But if you wrote a check, then you got the check number, which helps you to kind of verify the checks. And again, if there were electronic transfers, you would have the bank memo. All right, given that we got the $65,000. Let's do some ticking. Let's do some tie. And we're going to go back on over here and say, and I'm going to hide everything that's past January. So that cleans it up a bit. I ticked off the $25,000. I'm going to tick off the $65,000. Boom, found it. The date on 1-1. So that should be pretty close to the date that's over here on 1-3. The date in our books will always be before same day or before what hits on the bank because the bank information is going to lag. They don't know about it for a little bit longer. And then we've got the $50,000 here. So we've got the $50,000, $50,000, $1-1. So hopefully my dates are in 1-5. So that seems reasonable on the dates. So then I could say, okay, let's go ahead and mark that off. And then we've got, what else do we've got? We've got $7570. So 7570, boom, back on over, bam, and check it off into the $20,500. And we'll say, there it is, $20,500, boom, bam. And now I found everything that's on the deposits. These four deposits add up to that amount, which is this amount up here. So that should be the proper amount and would tie in to what we had over here, except that we added that beginning balance. So if I take off the beginning balance, we've got the $143,785. That's what you would expect to see normally, and that would be the $143,785. But I'm going to add the beginning balance in place here, and we're going to have to deal with that. So at this point in time, we've verified this number in essence. So we've got this number that I can check off, boom. This number's not quite there. I'm 5,000 off. So I'm going to have to go back. But if that was correct, and I had tied all this out, and then I tie all this out, my cleared balance, not my bank balance on the checking account in QuickBooks, but the amount that has cleared, which will be represented here, will match the bank balance and it'll be good at that point in time. And then anything that's unchecked off will be represented as outstanding on the bank reconciliation. So just to recap, this process that we did right here is reconciling. This is not the reconciliation. So once I'm done, this amount will be zero. This amount that didn't get checked off will be in a bank reconciliation report generated by QuickBooks from this data tying out the difference between what's on our books represented by the balance sheet and what's on the bank statement. And it'll show that difference as being in part this unclear deposit. So then the question is, well, am I concerned about the unclear deposit? I am concerned. It's a large dollar amount, but of course I can check because it's at the end of the month. I'm going to go, ah, it's pretty close. So maybe it's just outstanding. Maybe it just didn't clear the bank by the time they issued the cutoff for the January 31st bank statement. And I can easily go into my online checking at that point in time. And if it cleared in February, then I'm fine. No problem. If it cleared in February and I checked that, should I check it off here? No, because it didn't clear in January. And so that makes me feel comfortable about this check. I'm okay with or this deposit. I'm okay with it because I see it cleared. But I still want to report it as unclear and it's still necessary to do the bank reconciliation, not simply to find that unclear item. But because if I can get this balance down to zero, then I have verified not only my checking account information, not only whether I lost checks or whether the bank messed up or I messed up on the checking account, but also I'm verifying all the detail of these transactions and they have another side to it in the double injury accounting system, which will be reflected primarily in the revenue cycle, right? Because hopefully most of them are revenue, although some of these are initial deposits when we have the startup capital. But it'll have an impact on the revenue cycle. So I don't want to verify not only the ending balance, but also all the other sides of the transaction. So there's what we have now. Next time we'll go in and we'll do the same process on the checks side of things. Notice that you can leave and go ahead and leave without messing anything up. You don't have to complete the whole process at once. So we're going to leave. We're going to have some coffee. We're going to come back and we're going to do some, the other side, the decreases. No change to the financial statements thus far.