 QuickBooks Online 2024. Bank reconciliation month number one checks and cash decreases. Get ready and some coffee because we're going to save time with QuickBooks Online 2024. Here we are in our Get Great Guitars 2024 QuickBooks Online sample company file. We set up in a prior presentation opening up the major financial statement reports as we do every time reports on the left in the favorites right click in the balance sheet opening a link in a new tab same with the profit and loss report also the trial balance right click open link in a new tab let's check out those tabs we open tab into the right the hamburger closing it change in the range 010124 tab 022924 tab we want to see it on a month by month side by side poor father running the report tabbing to the right closing the hamburger to the left changing the range in the middle 010124 tab 022924 tab and then changing the months on the left and then running the report on the right and then going to the tab to the right closing the hamburger on the left changing the range in the middle 010124 tab 022924 tab and the drop down. I feel like I'm announcing a soccer game or something here. And the ball is at the side. Now it's in the middle. Okay. We're going to go into the running of the reports. Let's go back to the balance sheet. And we've been doing our bank reconciliations. Remembering that the bank reconciliation is basically, I would say mandatory for any kind of business as an internal control, whether it be large, small, or using bank feeds or not using bank feeds. We're doing the first month reconciliation, which has that beginning balance issue that we will be addressing at the end of the first month of reconciliation. This is what the books currently say at 88-810-27. This is what our mock bank statement says, 61-24185. So we need to do some reconciliation. And that's what we're doing at this point in time. So let's go back to what we started last time. The tab on the left, we're in the transactions. Remembering that the bank transactions over here, bank feeds can help with the bank reconciliations as we'll see in future section or course. But it is not the bank reconciliation to do the bank feeds. The reconciliation is over here. Even if construction, the books directly from the bank, then you still want to do the reconciliation because it'll at least double check that you haven't double entered anything or hadn't pulled some feed in for some reason. We're in the checking account. We're going to resume. If you weren't resuming, but was starting from scratch, you would have the info in here being the beginning balance. We can see as a problem because that doesn't tie out to our beginning balance over here. We will deal with that later. That's the first bank rec problem. The date is the date on the bank statement. We're not entering anything for the service charges or interest. I think these are old kind of things that we don't really need anymore, but are pulled in as a legacy article from prior times all the way back to the start of the desktop versions. So then we have our reconciliation summary up top, the statement ending balance, which we just typed in there directly from the bank statement. We have the cleared balance, which is this formula below, beginning balance, payments, and deposits, which will give us our difference, the difference between the statement balance and the cleared balance. Currently, we've only done the deposit side of things, the deposit side of things now matching out. If I go back on over, we're at the, actually I'm going to uncheck the 25 here for now. We're at the 14370. That matches the 14370, 85 on the deposits. Now we're going to do all of the decreases. Decreases typically being the largest and most complex portion of the bank reconciliation process if your deposits are properly formatted and grouped in your accounting system. So let's first just give a quick recap of the kind of decreases that we're going to have and what information the bank knows about and what they don't know about. So first we have a check type of transaction. If we have a check, then that means that we physically wrote the check or printed it out of QuickBooks, recorded the transaction when we wrote the check and then had to send the check to somebody. They have to receive it. They have to deposit it in their bank and communicate with our bank before the bank knows about it. So if we're still using manual checks, that means that we're going to have a big difference between the date. The date is going to be much less reliable. The date in our books is going to be much sooner than the date on the bank side because the bank does not know about it until the check has been received, deposited and cleared basically on their side. But we do have the check number with the check, which is great, giving us an added level of ability to tie out what is happening, even though the date is not going to be as relevant for us. And of course, we have the dollar amount. That's what the bank knows. Now the bank also has the canceled check, which usually isn't going to populate in the bank like memo area, but is something that you can often go to your online banking and then drill down on. So if you need to see who the vendor is and what not, or who the vendor is, you might be able to go to the bank statement and look at the canceled check and see the actual check from there. Now if it was an electronic transfer, then of course you're not going to have a check. So if you're paying people buy electronic transfer, you're not going to have a check. But the date is going to be much more close. So even if you're doing a full service bookkeeping system where I pay something in an electronic transfer, enter it at the point in time, the transfer happens, it's still going to clear the bank between like one to three days typically. So if we do a full service accounting system, our date in our books will be sooner than the date on the bank's books still, but they will be pretty close and likely for many small businesses, at least if we're doing electronic transfers, we're probably going to be dependent on the bank rather than enter the transaction on our side at all. In other words, we won't even enter the transaction on our side, wait till the thing clears the bank and then record the transaction with the use of the bank feeds. In that case, those are the easiest transactions to reconcile because we're not even doing a full service bookkeeping system. We're just taking the bank's numbers and pulling them into our system. So those types of transactions again will be the easiest things to reconcile. And then we could have some transactions that are facilitated by the institution that we don't know about like the bank charges. So the bank service charges, they charge us a fee. We didn't know about the fee. We couldn't have entered it on our side because they didn't invoice us for it, they just took it out of our account because it's a bank charge. So for that, we would have to enter that in our system if we didn't use the bank feeds. But if we do have bank feeds turned on, then we're probably going to be able to pick that up with the bank feeds. The bank feeds will show that transaction will approve the transaction and that is how that will typically be recorded. We also could have money that we took out physically possibly at an ATM or at an institution or at one of the bank locations, so the money that we take out would be like a withdrawal. And in that case, all we would see if we took out cash is the dollar amount that was taken out and the date. We're not going to see what it was taken out for, which could be a problem. So given that, we're going to do the same kind of process. We're going to basically say if it's on the bank's books, it should be on our books. And if it's not, we're going to have to add it to our books unless the bank is wrong, which is not typically the case. If it's on our books, but not on the bank's books, then that might be okay because that might be outstanding checks that we know about. But the bank doesn't know about therefore their reconciling items. Because of that system, then we typically want to be going from the bank statement to our books, not from our books to the bank statement, because everything on the bank statement should be on our books, right? Otherwise, we'll get confused. So I'm going to say here's the $12,001, hopefully our check numbers match up.