 QuickBooks Online 2023 bank reconciliation month number two deposits. Get ready to start moving on up with QuickBooks Online 2023. Here we are in our get great guitars practice file. We started up in a prior presentation using the 30 day free trial. We also have open the free QuickBooks Online sample company. If you want the to open at the same time we suggest using incognito window or another browser. You can open incognito if using google chrome by selecting the three dots in the in the browser. 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 then 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 incognito window and then type it into the search engine QuickBooks Online test drive. We're using the sample company to compare the accounting view the one get great guitars is in and the business view the one the sample company is in. You can toggle between the two by going to the cog up top change the view down below. We're going to be duplicating some tabs to put reports in right click on the tab up top duplicate it right click the tab up top duplicate it back to the tab in the middle as the tab to the right is thinking opening up the reports on the left hand side and looking at one of the favorites that been the balance sheet. If you're in the business view the reports are located in the business overview and the reports. We're going to go to the tab to the right and open up the favorite other report which is of course the income statement or P and L close up the hand buggy change the range 010123 to 022823. Let's look at it on a month by month side by side and run it and tab it to the middle close up the hand buggy scrolling up change the range 010123 to 022823 and let's see it on a side by side month by month run it to refresh it. There's the setup process we do every time last few presentations we did the bank reconciliation for month number one first month of operation emphasize and the fact that we might have specific problems related to the first bank reconciliation now we're going to do the second bank reconciliation that allows us to see what happens to some of those outstanding items we saw in the first bank reconciliation and it allows us to see what the process will look like in essence after having dealt with those first bank reconciliation issues. So let's actually open up another tab to to look at that prior bank reconciliation so I'm going to go to the tab to the right right click on it duplicate and you could find the prior reconciliation in the reports or in the bank reconciliation area I'm just going to go to the reports here because we've been there before reports on the left hand side closing up the buggy you could type in just reconcile up top and it should get there reconciliation reports so let's do it that way and that'll take you to the reconciliation and so you've got your your mapping up top so now you're in the chart of accounts bank reconciliation and the history this is the report we did last time if I was to view the report we get our nice summary up top and this is our statement balance this is our register balance the 27403 represents the difference there's the register there's our balance here and the bank balance is on the bank statement for January okay now we're going to go to February notice that when you do this you want to be using your bank statements even if you're if you have your bank feeds on and you've got online banking you're like I don't need my bank statements I could just print out my bank stuff anytime I want for any time range I want but you still want to have the bank statements because they have a very delineated very specific cutoff date that we're going to use in this case the end of January is this number that must be the same number on the next report that's what we're looking for here so if I go to February then the summary this is just a just a mock bank statement it's going to start with that number that is now the beginning number with our first bank reconciliation we had some issues with that beginning number because if we were starting a new accounting system and pulling in the data from a prior accounting system we might have had outstanding items from the prior accounting system we had to deal with once that has been dealt with then our beginning balance should always match out and we're not going to have an issue with it we still then we have our additions and our subtractions our ending balance still may not add up to what's on our our reports over here if I go back on over to our reports on the balance sheet we still have a difference here to what's in the cash account and that's because we still have timing differences that we're going to have to reconcile so we'll go through the same process now if you have the bank feeds turned on same kind of thing as with the first one just a quick reminder here that the bank feeds if you're constructing your books from the bank whether using bank feeds or you just take used to before they had bank feeds you could have taken the bank statement and just made your accounting system based on the bank statement but there's some businesses that can't do that so if you're in a business for example where you get in paid by gig work then maybe you can do that because you could just wait till youtube pays you and then record it as income once you get the deposit using the information from the bank to make the transactions that means your bank reconciliation will be very easy that means your information in your system will match what's on the bank and that's great but if you're in a system where you can't do that because you have a cash register for example then you might still be able to use the bank feeds but you're not going to be using them to record as much as you'll be using them to double check what have you what you have been recording that's more of a reconciliation process if you have accrual components such as when you're invoicing if you have inventory involved that complicates the system and you could still use bank feeds but you just can't construct your entire books from the the bank and therefore you you might have timing differences that are still there that we have to deal with so that's what we're going to deal with for month number two so this is going to be our our number over here that does not match what's on the bank statement so let's go through and open up the bank rec for the second month tap to the left the bank reconciliations are in the accounting tab on the left hand side accounting tab i clicked on it it didn't do anything accounting tab why is it doing that accounting tab there it is and then we've got the reconciliation so reconciliation closing up the hamburger if you're in the other view the sample company it's under the bookkeeping and then the reconciliation all right so now we're reconciling the cash account once again the checking account and now the beginning balance is at the 61 241 85 it should match out what our beginning balance is now and it should every time going forward because we don't have that beginning balance issue if we're reconciling properly each month we just need to populate the ending balance which is 101 590 05 so 101 590 0.05 hopefully i got it right this time i i went dyslexic last time 101 590 05 people are probably going to be upset from that last one that i messed it up the whole time but i think it's right i did it for example purposes though so it's okay i messed up on purpose so i can show the issues just like all every mess up so there it is so there's the there it is so then down here i'm not going to put anything to the service item and the interest item i think these are going to be they're not as useful anymore that you have bank feeds because if you have those items you probably would have included them in the bank feeds and even if i didn't have bank feeds i still don't like using them because i would rather enter those in on my own so i just don't typically use those and i'm gonna say start reconciling so we have our same summary information up top we've got the statement ending balance that's what we just typed in as the ending balance hopefully i got it right this time we've got the cleared balance which only includes the beginning balance at this point so if this one checks out i could say that's right that's one thing that's right now i just need to check these off and these off so that our reconciling balance should match which of course we don't have yet that's why we have a difference this cleared balance is represented by the beginning balance nothing on the payments has been checked off we're going to check these off like this where it will then change that up top and then the deposits will change once this gets down to zero we're good to go remember that it has to be at zero exactly or else you're messing up you're cheating and you're losing and you're not you're only cheating yourself by the way i don't want to because then you're losing a lot of assurance then if you wanted to hit the info this is the info if you messed up the beginning balance and you can go up there and do that so we're going to go to the deposits down below i'm going to sort this by the deposits and we're just going to check them off as we did last time remember that if you have the deposits in properly this should be a painless process if it's not a painless process it's probably because you have a do not have a good system for your deposits looking at the flow chart over here note that when you increase the checking account you not only want to get the dollar amount right but you also want to get the grouping right and that's because you want to make the bank reconciliation as easy as possible things that mess that up are things like cash transactions things like credit card transactions and PayPal and that kind of stuff can confuse things sometimes depending on your system as well for example if you get a cash register you have multiple sales of five five dollars if you put it directly into the checking account at five dollars each but then you physically deposit you know a hundred dollars into the account at the end of the day the two amounts may both be correct in total but you're not going to be able to check off the accounts from the bank statement in the reconciliation or through the bank feeds because the bank sees it as a hundred dollars where you see it as a bunch of five dollars amounts that's a problem the credit card company might do the same thing if you have credit card sales they might not deposit all the money into your account for each credit card sale they're going to group it you need to work with the credit card company to come up with some system so that when you make the deposit on your end it matches the credit card company same when you're using intermediate things like a PayPal or a stripe for example okay but we've done that and so everything should match out if we look at our if we look at our bank statement the information for the deposits we have a date that should be relevant because deposits should clear between you know one to three days and the amount should be relevant and if they were electronic transfers we might have in the memo more information to verify certain items such as and they could indicate who the customer is even though it would be in the memo field all right we're always going to go from the statement to our balance because if it's on the bank statement it needs to be on our side if it's not on our side and on the bank statement most likely the bank is correct and we need to fix our side if it's on our side of things on the books but not on the bank statement then it's possibly it's an outstanding item that's why we're always going to go from the bank statement to our books we're looking for this 3407 too let's do it then enough talk action here all you do is all you do is just talk about ranch rant this stat blah blah talkers man this is going to be 3407 too okay so that one's checked off on 125 and this one's on this one cleared on 2 1 so notice that this one was an outstanding item last time we wrote it in January it didn't clear in January that means if I look at my prior bank reconciliation down here in these reconciling items this one I believe is the one we looked at these are clearing now in February which is what we would expect that's what the timing difference is so I'm going to go back on over and say all right that looks good let's check that actually is that that's if I go over here this is the one that the 34 the 34 right so that one just cleared in February so that's good okay back on over then we've got the next one let's make that colored and then this one's on 12 250 or the numbers 12 250 so 12 250 this one we've entered on 22 it cleared the bank on 25 so it makes sense within a couple days so let's go ahead and make that one and then we've got the 4508 all right so 4508 220 so this cleared on 223 okay we've got the 750 750 boom we did it on 225 it cleared the bank on 228 okay and then we've got the 400 and the 400 so there's that and so there it is and so we've checked all of these off okay now we still what is what happened here here this needs to be there okay so now we've got them all checked off but we have some on our books that are not on the that are not on the bank statement they were written close to the end of the month so I can double check to see if those are legitimate items because I'm doing the bank reconciliation sometime after the month end in this case month in period in February 28th I wouldn't get the bank statement until like March 15th or something so I can see if the thing cleared in March if these did clear in March then I'm okay with that generally and I can just say well that's fine that these are just timing differences then and these are going to be the reconciling items just as with our prior reconciliation this was a reconciling deposit last time showing the difference from a timing change between what's on the books and what's on the bank statement so everything's rolling smoothly so far and before we go to the next half of the bank statement I'm going to save this for later and we're going to get some coffee or something and then we're going to come back in and finish it we didn't do any changes so I'm not going to pull up the trial balance and we don't need to check our numbers we'll just be back for further bank recs in a future presentation