 QuickBooks Online 2022 bank reconciliation month number two reports get ready because it's go time with QuickBooks Online 2022 here we are in our get great guitars practice file we set up with a 30-day free trial holding down control scrolling up a bit to get to the 125% currently in the home page otherwise known as the get things done page to the accounting view it's something you can do by going to the cog up top and switch to accounting view down below we will be toggling back and forth between the two views either here or by jumping over to the sample company currently in the accounting view back to the get great guitars we're gonna open a few tabs we can put reports in by going to the tab up top right clicking on it duplicating that tab back to the tab to the left right clicking on it duplicating it again as that is thinking we're gonna jump back to the sample company file take a look at where the reports are located in the accounting view on the left-hand side under reports back to the business view we're in the second tab the reports located under the business overview close up the hamburger open it up one of the faves that be in the balance sheet go into the good old balance sheet range change up top from 010122 to 022822 and run it tab to the right tab to the right and then a business overview close up the hamburger open up the P and L profit and loss and do the range change up top from 010122 to 022822 this time gonna change the months over here so I could see the side by side and then run it so we got the month of Jan Feb and tote and we're working on the month of Feb currently going back to the tab to the left we're now focusing in on in the balance sheet the cash account because we're doing a bank reconciliation and we're trying to reconcile this number as of the point in time of February 28th to what is on the bank statement that's what the bank reconciliation is for we were almost done with it last time but we're holding off to push the button so we can review the reports this time now now is the time now we get to push that button so let's go to the tab the left to do that we're gonna go into the bookkeeping item down below if you were in the accounting view it would be in the accounting tab on the left hand side and then reconcile up top and the business view it's in the bookkeeping reconcile close in the hamburger and then we will presume to resume the reconciling process here we are we got the breakout this is where we stand we got the the statement ending balance which is equal to the cleared balance in other words the statement ending balance now equaling the cleared balance is the 101 5905 how did we get there well we took the beginning cleared balance which was the 61 241 85 that matching out to the cleared balance here that's not what was on our books at the beginning that was the cleared cleared items as of the beginning and then we had the payments of the 11 633 that cleared this time frame and the 51 981 20 deposits which make up now the cleared balance which is taken tied off the same thing as we saw up here in our bank statement because everything on the bank statement was on our books and we checked those items off to get to this ending balance therefore the statement balance is now the same as the cleared balance which is represented by the zero on the right hand side however this is not the bank reconciliation report or even a summary of it because we don't see here the book balance neither of these are the book balance the cleared balance is not the book balance you can see here it does not tie out to what is on the balance sheet as of this date February 28th that's what we checked off that's what we have cleared what's included in our books that is not included in the cleared balance the stuff we didn't check off down here including this one which was not checked off last time hadn't cleared in January even though written in January it's still included in our book balance as are this deposit here and this deposit deposit the check that are down here all these items then we expect to clear possibly in the future they're included in our book balance not in the bank balance therefore those are the reconciling items which will be used to compare bank balance to book balance these two things being exact difference we know they're the exact difference because this is at zero let's go ahead and finish this thing up so if we hit the drop down these are options remember that when we finish this thing up this needs to be at zero if it's not you could force it to be at zero by saying I want you to finish it anyways and I want you to enter the reconciling adjustment but even if it's a small reconciling adjustment like under a dollar you are still losing a huge level of internal controls if you can't get it exactly to zero which we should be able to do if our beginning balance ties out because it's just a matter of ticking and tying everything off and it has to reconcile it has to work and if you're if you're off by like a dollar or something it's possible that was from 20 checks and 30 deposits or something like that that happened to net together to be off by a dollar noting that if it was off by a dollar and I just cared about this ending cash balance and I was like even if it was off by you know a few a hundred dollars or you know a thousand dollars I could say well that's in material with regards to the cash balance and I know the cash balance is right because that's what's on the bank it is what it is it's in the bank right now so who cares if it's a dollar adjustment or a $100 adjustment it wouldn't matter too much if it was just about the ending balance of cash as of this point in time but it's not it's about all the activity all the activity meaning all the GL activity that's going on down here we want to make sure that all this stuff is correct because this stuff is involved in the other side of the double entry accounting system each transaction having at least two accounts being impacted and therefore if we omit a couple types of things that happen to net out to only a dollar difference it could be a big difference with regards to the activity in the financial statements so we want to we want to get that to be zero and we should be able to get that to be zero pretty much it you should be able to do it okay rant over let's finish this finish it finish it you reconcile this account see the report let's view the reconciliation report I like to check it out please pour five or and so here we have it to 28 remember this report's a little bit different than any other report you might want to I basically like to take a copy of it so I have a copy of it because if there are changes or something is deleted to the data in the system that it was part of the bank reconciliation this report can't really be updated by the deleted item because if it was you'd be out of balance so so it's possible to kind of mess up the data after you have reconciled and you want to have the bank reconciliation in a static position that doesn't change with anything that happens to the prior data if you delete for example a clear transaction so that you can then see that you were in balance something happened and for try to see what what happened that could that could mess things up so for that you might want to save the report print the report just to make sure so we've got this is happening as of 228 so we're gonna say this is the statement beginning balance 61 241 85 that of course a mirroring what we have over here on the bank statement then we've got the 11 6 11 the checks payments cleared and the deposits to get to the ending balance which of course basically mirrors the 51 981 and the 11 633 to get to the ending balance of the 101 590 05 right there now that beginning part isn't really the bank reconciliation in my opinion that just is a summary of the stuff that's basically the cleared activity that's not what we're really interested in what we're interested in are the outstanding items the difference the reconciling components the things that didn't clear so in other words it really starts right here the 101 590 05 which is the statement balance or the cleared balance same type of thing the bank balance and then we have the unclear transactions of this amount to get to the register balance so this component right here these last three numbers that's the reconciliation that's what we care about this ending number the 95 250 906 that reconciles to what's on our balance sheet as of this point in time 228 the cutoff date so 95 250 906 there it is back on over that's the reconciliation but if you just give this top component this little summary piece to say an auditor they would be suspicious because that's how auditors are they're suspicious they're skeptical and they're gonna say how do I know that you didn't just like make up that 6033 whatever 99 as just like the difference you just said oh well yeah because we don't tie out to the bank statement it's just that 6330 99 I don't want yeah I want more detail so the real component is what is that consisting of what are the outstanding checks and deposits for that we got to go down to the detail down below if we go down to the detail we got a lot of detail which once again is stuff that I don't think we really need but we also have the detail that we do need so we've got the details here checks and payments that clear these are the ones that we ticked and tied off in our books to what's on the banks side nothing really important here or nothing that we don't already have on the bank statement because we're just basically saying these are the stuff that cleared the bank so this isn't the stuff we're totally interested in here's the deposits that cleared the bank then we have the additional information here are the unclear checks and payments as of 228 this is what we care about there's the total in terms of checks and payments the 5 8 9 0 and then here's the deposits the 226 0 and if I was to add those up or subtract them out whoever you want to sit pulling out the trustee calculator to do that we've got the 8 5 9 0.99 minus the 226 0 we've got the 6 3 3 0 that 6 3 3 0 time out to what we have here 6 3 3 0 99 so then we can tell the auditor that's what makes up the difference Mr. Auditor and they're gonna say well why do you have this long report just to give I mean that's just the way QuickBooks does it they give you that all that information it's not my fault so then down here now we've got these outstanding checks and these outstanding checks we can see if they've cleared most likely in the next time period because when we're doing the bank reconciliation for February 28th we're gonna be doing it at some point in March because we're gonna need the bank statement to do it and it takes a little while to get the bank statement so we could check in the bank account and see if these transactions had cleared the bank in March if they have then we can have more assurance that these are valid transactions that are just timing difference if they have not does not mean that they're invalid transactions but we're gonna be more and more concerned the older and older these transactions are outstanding and not clearing for example this first one the the on 126 is something that we wrote in January and hasn't cleared the bank in January or February so it's been over a month now this was an outstanding item last time when we did the bank reconciliation in January still an outstanding item so we're getting more concerned about that we might want to talk to Staples the person we paid and say hey look why I'm showing that we wrote a check did it did you get the check is it lost do we owe you money are you sitting over here fuming that you're mad that we haven't paid you when I thought we paid you look like we paid you on our side we're not trying to should not pay you so that's the kind that's what we want to be able to do that's one of the components that you want to be able to do with the check these items all look like they're here on two on the end of February so we would expect to be fairly normal if it had not yet cleared at this point in time then we have the deposits both of these are towards the end of the month we'd want to check that they had cleared in the following month March which they probably would have because deposits should clear fairly quickly if they have great no problem remember however that the bank reconciliation process is not simply to double check that these outstanding items have cleared although that's a useful tool and something that we'll want to do and keep an eye on but it's also to make sure that we have the exact difference between what's on our books and the banks books because if we can see exactly what the reconciliation is it not only verifies the un you know the outstanding transactions that we can double check on but it gives us their verification that all the clear to transactions are valid transactions to it gives us a lot more confidence assurance faith and the bookkeeping system in general which is what we would call a huge internal control over errors or safeguard against making errors possibly number two internal control second only to the double entry accounting system itself so let's go ahead and print this thing out let's do that shall we let's go up top I'm gonna hit the printing button up top print it let's do the printing and I'm gonna use the cute PDF printer if you don't have one some kind of PDF printer it doesn't have to be this cute one although I'm not sure this is the cutest printer ever they just named it that but it works and I think it's free so check it out get one so that if you don't have a printing option you can print it to a PDF printer and still save it as a PDF like we're gonna do right here I'll show you I'll show you how it works see then it opens right here and it saves it to instead of printing it so it's gonna be I'm gonna say bank rec and then it's gonna be Feb there we have it we'll save it and that should put it in my folder over here bank rec Feb bank Rick Feb right there there we have it now if I if I was to leave this now it opened up a new tab to open up the report I'm gonna go back to the tab to the left and then I've got my cookie trail kind of up top so I can go back to the chart of accounts or the bank register area here or I can hit the drop down on the hamburger go back into the bookkeeping and if I wanted to go into these items notice it it kind of goes into the reconciliation by default but I can go into the summary up top and now I've got my my report the last one being displayed here at the 228 the 228 so remember you want to kind of print those out because like I say the later reports gets more difficult to get back to the earlier reports because these reports do not act the same way as other reports they can't really be adjusted with the data as the data is adjusted because if you were to delete a check it would mess up the bank reconciliation so you probably want a hard copy of the reports I would I would suggest having the hard copy of the reports and you might be able to get into the reports if you go into the good old business view here and into the reports section and then look for the reconciliations I think they're called reconciliation reports let's just do it that way reconciliation reports and there are our reports so we've got both of them here for 228 and 131 let's go into the 131 here and run it looks like it is picking it up and I believe this will be a static report so again even if you made changes like say you deleted a check that had cleared in in this period and we marked it as cleared I believe that this report will stay static and not basically be out of balance after that after that happens but again I still feel comfortable personally maybe it's just me I'm getting more and more techie these days I'm relying more and more on all this all my banking online and bookkeeping online and transferring stuff online that was sensitive information but now secure or whatever but I still I still I still kind of like printing out or saving at least as a PDF my bank state my bank reconciliations maybe it's just me but that's what I recommend so then I'm gonna go back to the tap to the right let's look at our trial balance to trustee TB to see where we stand as of now so we had some changes to the to the profit and loss you'll recall if we go down because we we posted some items during the bank reconciliation process for example to the expense account for bank fees we put some bank feeds in place and we also had an adjustment if we go back to the balance sheet that we put to the draws account the draws account down here in the equity section so there's the equity section at $500 draw so this is where we stand let's open up then the trial balance tap to the right I'm going to go to the to the handbook and let's go to the reports and see that trustee TB type in and trial balance to do so trial balance and then close in the bug ham that is handbook 010122 to 1231 22 there's only two months of data but I just go all the way out to the end of the year just as a matter of habit maybe a bad one but it is what it is and then we're going to go down and say that if your numbers tie out to this and you're following along then if any mistakes have been made I made them too because we got the same stuff right and then so if your numbers don't tie out to this then it possibly is because of a date range issue try changing the date ranges and we'll take a look at the transaction detail report at the end of the section to diagnose any differences