 Resume the reconciliation. Now note that the data that we entered before if I hit the edit button up top was the 25,000 that's gonna be that kind of issue one up top because it's 30,000 here That's our beginning balance problem. We'll deal with that later But let's imagine that that was in balance if that works for now because now we're gonna focus on the additions And once I get the additions all in there, which are broken out down below I would like it to sum up to the total here of the 143 070 85 of The reconciled or checked off Additions or deposits to the checking account that is our focus at this time. The ending balance is going to be the 61 281 45 once we reconcile that should be our cleared balance down here and That's the process. We're going through so just a quick recap This is the statement ending balance minus the cleared balance We should be equal to the statement ending balance once we fix the beginning balance problem Once we enter all the payments or check them off and once we check off all of the deposits This is our focus this time to get that deposit number in essence to match this 143 70 85 Okay, so let's do that. So then down. I'm just gonna close these up We've got we're gonna sort by date now It's easiest to do this by basically just clicking on the deposits side of things and now we've got all of our deposit information So note, this is gonna be fairly easy for us to do because we set up the deposits in such a way that it everything should tie Out everything should work. Let me give a quick recap of of that process. Let's take a look at the At the flowchart down here the deposit forms are they're gonna be the things that ultimately increase the checking account But remember you have a couple issues with the deposit forms Obviously if you're getting paid with checks or if you're getting paid with electronic transfers or if you're getting paid By something like a like a Google or something like that's giving you a payment Then those are going to be deposited in your checking account in the same format as they will be seen on your bank statement No problem. However, if you get cash receipts for example or credit card payments Those can cause problems as well as if you're using an inter Platform like a PayPal or a stripe or something like that. Then you've got these issues in terms of You might have the right ending balance in your account But you might not have the same grouping as it is going to be show on the bank statement And that grouping is going to be important because you want the grouping to be the same So the reconciliation will be as easy as possible and that's what we talked about every time we said That we say you're at a cash register, for example, you're collecting cash You're not going to just deposit those sales directly into the checking account in your bookkeeping system because then you would have a bunch of five dollar sales or cash increases deposits in your checking account and If you actually physically make the deposit at the end of the day with one lump sum deposit of all those five dollar cash Amounts then you're gonna have this issue when you reconcile at this point in time Whereas we're gonna have these lump sums sums on our bank statement But within QuickBooks, we're gonna have all these five dollar amounts that we're gonna have to add up to get to That's not what you want to see happen You could have a similar issue if for example, you have a credit card a credit card situation and In that in that situation the credit card company is gonna group your sales together They're probably not gonna make deposits into your account five dollars at a piece They're probably gonna group them together and deposit them and therefore You can have an issue again. How do you deal with that issue? That's when we talked about the clearing account which sometimes used to be called undeposited funds Payments to deposit you try to work with the credit card company You try to work with your system for how you're gonna make deposits into the checking account Use the clearing account so that you have this added step of putting the money in the clearing account And then making the deposit so that the grouping matches what's on the bank statement so that you can make the bank Reconciliation easy basically almost automated Would be the idea you can have a similar issue with PayPal Or Stripe when you get those payments How are you gonna get those payments and then pull them into your your accounting system so that when you make the deposit? Ultimately, it will match what's on the bank statement So those are issues that you got it You got to think about in terms of how your system is set up once that set up properly Then it should be very easy to to enter the deposits for most for most companies and check off and do the reconciliation process If it's not set up properly, you really want to kind of think about how you can get it set up properly because this is a huge internal control Okay, so let's just give a quick recap of what the bank has on the deposits and how we can kind of tie this stuff out Note that when you make a deposit the bank statement has the date of the deposit of course And it has the amount that has been deposited now The date might be a little bit after like if you deposited cash It might take a more like three days to process the cash deposit But it should be pretty close to the date that you entered it into your system So if I entered in my system into the day cash deposits are 65,000 or whatever and then I go to the bank and I deposit that into the bank there might be like a three-day difference between What's on my books and what's on the bank book? But the date is quite relevant because it should be quite close We of course have the dollar amount The dollar amount is a huge thing to help us to tie out our deposits because sometimes we don't have any added detail We might not have anything else other than the date and the dollar amount And if that's the case then then we want to make sure that we don't have this issue with our dollar amounts Having like five dollar amounts that tie out to the 65,000 right we want that to be as easy as possible now If you have electronic transfers, then you'll also have often times a memo that comes in through the bank feeds and stuff That'll be on the bank statement Which could be an indication or give you the information for who you got the money from like the customer So that's why these the electronic transfers are nice because they actually give you more of an audit trail making it easier to do the bookkeeping making it easier to automate the process in some in some ways and possibly Integrate the bank feeds into it. So you got another piece of data Contrast that to the expense side of things or the or the decrease to the checking account on the decrease side of the checking account If you just write a classic old check Then the date is no longer a real as useful of an item because it takes a lot longer for a check to clear But the check number becomes something that helps you to tie out more closely and the amount Of course is still going to be relevant and should help us to tie out if it's an electronic transfer on the Decrease side of things once again the date will be much more relevant You won't have a check number, but you might have that added memo information, which would help you to know who the vendor is Okay So what our strategy now is to is to always be going from the bank statement to our books And we're just going to tick and tie this stuff out now note that if you constructed your Your books from the bank statement you could basically just click all of them off. I could just go boom just take them all off but But and just select all of them Right, I could do that and it would just tie out But if you have a full service accounting system, you might not be able to do that So I'm gonna uncheck those the reason I always want to start from the bank statement is because there could be things on our bank statement I mean is because there shouldn't be things on the bank statement that are not on our books If there are we're gonna have to add them or see what the problem is But there might be things on the books that are not on the bank statement Therefore when I if I go from the bank statement to the books Then then I should always be able to find what I'm looking for if I go the other way I start to get confused and say well, I don't see it. Is that is that right that it's not there