 QuickBooks Desktop 2023 Bank Reconciliation Month Number 2 Deposits. Let's do it within 2-H 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 in the home page to the gray area in the view drop down. We've got the hide icon bar open windows list checked off open windows open on the left reports drop down company financial looking at that profit and loss. We're looking at you P and L we're going for the month of February January through February. Let's say from 010123 to 022823. And then we'll customize it font into the numbering change to 14. Oh, yes. Okay. Then reports drop down again company and financial this time the balance sheet. The big balance sheet customize it from 010123 to 022823. And I'm going to make a little bit of a change here. I want to see the two months at this point in time. So I'm going to see the breakout by month here. So then I'm going to go to the fonts and numbers and bring the font size up to 14 as is our custom. Okay. Yes. And okay. We're now looking at the bank reconciliation for the second month after having done the first month already. Recalling that when we did the first month bank reconciliation, we have some problems unique to the first month that are often there. That being that the beginning balance is something that we have to add into the system. It might not tie out to the bank reconciliation or the bank statement. And we have to account for that. Once that's done, once your beginning balance is right, once your bank reconciliation process is on track, then following bank reconciliation should be much easier as will be demonstrated here in the February bank reconciliation, which is more like what we would expect to be happening on the normal process going forward. So if we go back to the bank statements, let's take a look at the bank statements over here. The last time we had the bank statement for January and we ended up with a cleared balance of the 61-241-85. Note, remember that that cleared balance does not represent what our book balance is as of that same date because we have the outstanding checks and deposits. So the system is now tracking the items that are cleared versus unclear. That's what the bank reconciliation is doing. When I get to the second month, I'm going to have some items when I go into the bank reconciliation, which will be in the banking dropdown and reconcile. We'll have some items in that worksheet that were items that were written entered into our system, in other words in January, but which didn't clear the bank, which we didn't check off in other words as cleared in January. That's the point. So we're going to have some of those items in the February reconciliation, that being part of the timing difference that we have to deal with. And then we'll have the unclear transactions we would expect to have at the end of February, which won't clear the bank possibly until we would expect say March. That will be the general process. So we're going to have the same kind of concept over here. We're going to go to February. Notice that this beginning balance for February should match the ending balance for January. That will be the case with your bank reconciliation. That's also why you really need to do it with the bank reconciliation. You don't want to just run a transaction detail report from your online banking because you don't have that really static delineation of this is the end of one period and the beginning of another period. That's what you really need to reconcile because you're trying to see where the differences are as of a certain point in time. So from the bank side of things, this is the ending balance last month. This is the beginning balance for this month. That one ties out, I'm sure, and we don't have that beginning balance problem because our reconciliation was done properly last time. Let's check that out. Banking drop down. We're going to go to the reconcile. I'm going to say this is for the check-in account. It's automatically populating for the second month. The end of February, that looks good. The beginning balance now ties out 61, 241, 85. So when I'm reconciling, I can just check that off as something that I'm good to go on. So there is that. And then the ending balance is going to be, what do we say it was? It's going to be 50. It's going to be 101, 590, 05. 101, 101, 590, 0.05. 101, 590, 05. 101, 590, 05. Okay, that balance, of course, doesn't match what's on our system side of things because we're going to reconcile between the two. I'm not going to add service items or interest here because I like to add those. Once we reconcile, I think that's easier to do. So I'm going to go ahead. Now also remember that if you got last time wrong, meaning if this beginning balance doesn't tie out, then you're going to say, well, is it worthwhile then for me to undo the last bank reconciliation, which shouldn't adjust anything or make any changes to what you input into your system. It just means that the reconciliation process, tying our books to the bank books, checking off all the stuff in January would be, you'd have to redo that. And if your beginning balance is off, it might be worthwhile to do that. So that's how you go in and kind of fix the prior months if you needed to. So I'm going to go ahead and say continue. And so there we have it. Now our beginning balance is proper. So everything is good to go. We're going to be focusing in on just the deposits this time as we did in the prior month. Remembering that deposits should be fairly easy because usually there are less number of deposits than checks, although we're hoping the dollar amount will be greater. The deposits will not be easy if you don't have the matching of the deposit format, the grouping of the deposits, the same on the bank statement as you have in QuickBooks. Remember to do that. If I go to the home page, you got to make sure that when you're collecting money from the customers that you are depositing them into the bank, possibly using the undeposited funds to group cash deposits and credit card deposits possibly in the same format as they will appear on the bank statement, which means you might have to discuss that with your banking institutions like credit card companies to get a system down that works so that you can then make your bank reconciliation easy. Otherwise, you'll be adding stuff up when you reconcile making a tedious process out of something that should be an easy one. So let's go back to the bank reconciliation and we're also going to be always tying out from the bank statement to the books because if it's on the bank statement, then it should be on our books. If it's not, then the bank statement is either wrong, which isn't typically the case, or we need to add it to our books. If it's on our books but not on the bank statement, then that could quite well happen because those will be the outstanding items. The deposits will also have dates that are going to be more relevant than check dates because if it's a deposit, it should clear the bank within, you know, four days or something like that. And then also, if you add cash deposits, you won't have any other thing else really to tie out to, but if you add electronic transfers, you also have that bank memo detail that could help you in some cases as well. All right, so we've got the 3407250. Going back to here, we're going to say here are the deposits. 3407260, notice the deposit should always be after, some point after we entered it into the bank because obviously we would enter the information before it cleared the bank. It could never be the other way around. It might be messed up in my practice problem if I messed up a date somewhere, but it should always be that way, right? We entered it into our bookkeeping first and then it cleared the bank. And then we've got the 12250, 12250 here, 12250. Boom, checking it off. And then we'll highlight this one. Bam, 450870. So there's the 450870. Boom, and then bam. And then the seven, I'm going to do these two at the same time because I can memorize. I'm just going to picture those two in my mind, check them off at the same time. 750, two at a time, two at a time. That's the amazing memory skills I have. I can remember like two, so you're supposed to remember seven. I can't do seven, okay? I can't remember phone numbers, but those two I did. So there's that one. So then, so that means that if I go back on over, we haven't checked these off, but now I've got the beginning balance. I've got the 5198120 that ties out to this. So that checks off. And if I can check off all of the decreases, then my cleared balance will match the banking ending balance. And that will be shown here with the cleared balance, matching the ending banking balance, which will not be the same as the book balance on the balance sheet as of the cutoff date into the bank statement for February because there will be the unclear items. In this case, these two items are unclear. That will be the reconciliation, the difference which will be shown on the bank reconciliation report. Now note that these two unclear items, they are of concern. We're going to say, okay, we have these two items. We deposited these in February. They're not cleared on the February bank statement, but they're not a big concern because they're close to the end of the month. And when I'm reconciling, I'm going to reconcile at some point after February. So I'm going to have to do the reconciliation process at some point in like March. So I can go on to my online banking if I have that and see if these deposits cleared in March. If they did, then I'm not worried about these two deposits. I'm like, okay, that looks legit. That looks good. I still have my money. I'm good to go on that. And I'm going to show these as unreconciled. They're the timing difference that will be able to tie out my book balance to the bank balance. And if I can tie that out exactly, I'm not just verifying those items that are not on the bank statement. I'm verifying that all the transactions, even the ones that are checked off are legitimate by doing that. I'm have a huge internal control, not only over cash, but also over all the other sides of the transactions within the double entry accounting system. And cash is in all other cycles as we have discussed huge internal control. So in future presentations, we'll go on to the payment side of things and continue with the process. I'm going to go ahead and leave right now. We'll get a cup of coffee. We'll come back and we'll continue on.