 QuickBooks Online 2022. Bank reconciliation after having entered data using bank feeds after the first or initial month of bank reconciliation. Get ready because it's go time with QuickBooks Online 2022. Here we are in our bank feed 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 in the business view as compared to the accountant view. You can change to the accounting view by going to the cog up top switch to the account view down below. We will be toggling back and forth between the two views either here or by jumping to the sample company file currently in the accounting view back to the bank feed practice file. We're going to open a few tabs to put reports in by going to the tab up top right clicking on it and duplicating it back to the tab to the left right clicking again and duplicating again. As those are thinking we're going to go on down to the sample company just to locate where the reports are located, which is on the left hand side under the reports in the accountant view. If we go back on over to the business view, it's still thinking, but that's okay. It's going to find the reports here in the business view, which is under the business overview on the left hand side. Then in the reports closing up the hamburger, open up the major financial statements reports, including the balance sheet here, the big balance sheet. And we'll do that three months this time. Let's do the three months on the ranging of the changing from 0901 to 1130 to one. And then we're going to change this from total only two months. We don't just want the total only we want the months run it. And so there we have it step October and November. We're working on October now on the reconciliation now going to the tab to the right. We're going to go into the business overview this time opening up the reports again closing the hamburger again. But the new thing profit and loss report this time the PNL otherwise known as the income statement range change again was to that three month time frame with the side by side. Mode 901 to one to 1130 to one and then take this on down to the months months. And then that's good. Let's run it running it. So this is our activity. And so now we're going to go back to the second tab we're focused here on the second month of bank rec. So the first month we saw that we have that like initial balance problem that we have to put in place oftentimes when you do the first month of bank reconciliation because as you pull the data into the system using the bank feeds you're going to be pulling in the activity to get to the ending balance. So you have what has happened during the period but you often have to add that beginning balance if you're not starting at zero when you start entering the bank feeds into the system. Once you have done the initial bank reconciliation the following bank reconciliation should be an easier thing to do. So if I go to the first tab then we can say OK we've been entering the data just a quick recap here recap. We've been entering the data in the bookkeeping area in the in the transactions up top and then in the banking section. This is where our bank feeds are at and we tried to enter the data in essence mostly with the bank feeds. Remember that if you're reliant on the bank feeds to actually enter all your data into the system meaning you're not entering it first but you're waiting till it clears the bank to enter it then all of your data will in essence match the banks. If everything has been input properly making the bank reconciliation a lot easier especially after the first month or initial month because you won't have that beginning balance problem. So the second month going forward would be a lot easier. Any if you're not if you're deviating from just reliant on the bank for example if you have a cruel system that is in place then remember that you're going to possibly have outstanding checks and deposits. And that's natural that is going to happen. That's the reconciling items and doing that system gives you a little bit more control internal control matching your books to the banks books instead of just relying on one set of books which is in essence the banks books. But it takes a little bit more work for the reconciliation. Okay so then if we go to the reconciling item down here it's going to be in the bookkeeping as well if we're looking at this view and then we're going to go to reconcile down below. If I go to the other view the accountant view it would be under the accounting tab under the accounting tab and then reconcile on the left hand side. Okay so then we're in the reconciling I'm going to close up the hamburger now remember the last times we did a reconciling and you could look at it in the history. So if I go into the history over here I can find that reports you can also basically I believe find it in the reports area but this reports a little bit different than the other reports because it's not being constructed as you enter the data it's more of a reconciling a double check type of thing and internal control type of thing. If I view the report this is our report from the last bank reconciliation that we had done basically tying out to you know adjusting the bank statement to our books as of January so this was the statement ending balance that we saw here. If I went to the mock bank statement twenty thousand five five four eighty and we reconciled that to to the register balance which is on the books fourteen four thirty seven sixty. If I go back to my balance sheet fourteen four thirty seven sixty for September now we're going to do October let's keep that tab open that's a good tab to have let's make another tab I'm going to right click on it and duplicate it again. Pull this one to the left so that we're going to work on the left and then we got our three reports on the right now let's go back into our bank record I could I could do it a couple different ways I could go back to the register this way. And I can well let's go do it this way let's do it this way let's go to the bookkeeping down below and then go to the reconciling again and close up the hand buggy. And we're going to go into the chart the checking account so we're doing the checking account this time it's for nine thirty last statement was nine thirty so we're going to the following statement after that. This was the beginning balance now so if we look at our mock bank statements which hopefully I can jump back and forth a little bit better this time we ended off last time at the twenty thousand five five four eighty. If I go to the next statement that's going to be the beginning balance for the next month. So here's our activity here's the additions here's the subtractions here's the ending balance forty one three six six seventy eight four one three six six seven eight. Ending about four four four one three six six point seven eight was added was that right four one four one three six six seven eight it's easier by the way with two screens four one three six six seven eight but I can do it with one screen because I'm super competent and practiced in this stuff but I would recommend two screens. I'm going to bring it on back to eleven thirty eleven thirty we're on ten thirty one ten thirty one ten thirty one Roger that let's go ahead and start the reconciliation process. Start it out OK so we got our statement balance that's and that's what we put in on our statement we're going to have that matching the cleared balance which is not all the activity in the system but rather it's everything that we check off the things that we don't check off. Are going to be the reconciling items now if you're completely dependent on the bank and you're creating your system just purely from banks feeds. Then all of this stuff might be checked off already because it's trying to help you out by reconciling as you enter the data using the bank feeds because that's basically that transaction has already been matched to the bank. So you can you can see that it checked all these ones off all automatically already. And so if that was all the transactions we could just basically we could just basically reconciled this would be at zero but you can see there's a problem. Now if there's a problem and this isn't at zero then the fact that it checks it off for you already could be helpful. We could go back in there and try to find what the differences but a lot of times when something doesn't match up the reality is the easiest thing to do is just uncheck everything. And then do it again and we'll just do it again just for practice purposes so you can see how the bank work so I'm just going to say OK thanks for trying to help me. Are you sure you want to select I'm going to say yeah I'm going to uncheck the whole thing. And so I'm going to do it again just like a normal bank reconciliation. Now the goal of course here is the bank balance for October is 34 to 49 49 which differs from our statement balance of the 41 366 78. So what we're going to do is find what that difference is by ticking and tying off everything on the bank statement to our books. If it's on the bank statement and not on our books we're going to add it to our books unless the bank is wrong which isn't normally the case. If it's on our books and not on the bank statement then it might be an outstanding item which is going to be the reconciling item outstanding items like checks and deposits. So we're going to be going from the bank statement to our books and just tick and tie everything off. The first thing we can take and tie off is the beginning balance which matches out this time. I don't have that beginning balance problem because that twenty thousand five five four eighty is what's over here. Let's see if my mouse my mouse gets lost sometimes. It's not my fault the mouse is the mouse gets hungry twenty thousand five five four eighty and then it just starts wandering around. So if the mouse starts wandering around randomly it's not my fault. It's not my fault. I'm going to go into the deposits here and then we're just going to tick and tie these things out now. So I'm going to do the ticking and the tying. So we're going to say nineteen oh seven I'll try to do two at a time nineteen oh seven and one oh five oh so let's do that mouse. So there's nineteen oh seven and one oh five oh if I get the dates a little off it's a practice problem bear with me. And and so we've got those two. I'm going to go back on I'm going to go back on over and say OK let's yellow five those to say that we found those. This would be that like just the process of reconciling and we'd say fifteen thousand nineteen oh seven. So we're going to say all right fifteen thousand. Wait a second. I already got the nineteen oh seven. Okay. So nineteen. There's two nineteen oh sevens. There's. Oh there it is. OK. OK. I see it. I see what's happening around here. I thought there was a problem but no it was just me being stupid or paranoid or both. Let's go ahead and go ahead and yellow five those two. Three eighty two fifty and another nineteen oh seven. What is going on with the nineteen oh sevens you might ask. I might ask. Another nineteen oh seven three eighty two fifty three eighty two fifty nineteen oh seven. Oh that's a monthly charge probably is what we're thinking. Okay. Cool. Now let's go back on over. Eighty two fifty nineteen oh seven oh nine nineteen oh seven. Nineteen oh seven. Back in nineteen oh seven. There was something what was the other one. You remember what the other one was. Was the other one was nine oh nine nine cents. That's a funny number two nine cents just nine cents. There it is. Then I'm going to go back on over where are you going mouse. Where are you going. Got to find your way to the proper location here. Got to put some little food on this page so the mouse always comes back to it. One two five zero eighty. One two five zero eighty is right there. And then we're going to go back on over and say OK. Wait that's the wrong spot. Here we go. And we're going to yell at one ninety three twelve one nine three twelve one nine three twelve. And then let's go ahead and mark that off as done five thousand sixty four twenty four. I can do two at a time. I can do two at a time. My brain holds up to seven items at a time. That's what I'm told. That's why the phone number has seven numbers in it. My brain can hold seven numbers for like two seconds. Nineteen oh seven thirty eight fourteen. Nineteen oh seven and thirty eight fourteen is down here. That one tried to trick me but I was I wasn't tricked this time this time. You win this round three seven thirty five and twenty cents. So seven thirty five and twenty cents. And then I'm going to say let's mark those off and then seven and thirty five sixty two. So seven and thirty five sixty two. There's the thirty five sixty two. But I think I got the seven and the seven. This was seven and seven thirty five. So I think those two should be checked off but I might have done them wrong. It tricked me. The thing tricked me that time. But I think they both should be checked off because now I'm confused. What about that twenty cents? What about the twenty cents? I already got the twenty cents right there. It should be checked off right. Okay. So that should come out to twenty three one twenty four forty one. I could check my number there twenty three twenty three one twenty four forty one. Roger that ten four twenty three one twenty four forty one twenty three one forty one forty one. Twenty three one twenty four forty one. Doesn't work if you say it wrong. Twenty three one twenty four forty one. Okay. So now let's go to the other side of things and we'll go to the checks and down things making it go down. Payment stuff. Payment side of things. Same thing. We'll do some ticking and some time some time and some ticking. We're going to go one nine four four ninety nine starting about one at a time. I don't want to over extend myself. Dates might be a little bit different because it's the example problem. Bear with me. This is just kind of the example. We're just ticking and time from the bank rec to our books in the reconciliation process. Where are you going mouse? Go to the right spot. That's where the food is. The food's right there. Sixty two thirty three one twenty four. So sixty two thirty three sixty two one twenty four sixty one. Okay. Okay. And then we're going to go back on over and check those off. Check those off. Seventy five and fifty and twenty five fifty. I'm going to do three at a time. This has never been done before. Twenty five fifty seventy five. Seventy five and thirty was it. I think that was it. I'm going to check it off. I can't really remember. No. No. Thirty's down here but it was twenty. See now you did three at a time. You couldn't handle it. That's way too much. Seventy five and twenty five fifty. Seven things in the brain at a time. Twenty five seventy five. So twenty five and seventy five. Twenty five and seventy five. Where's my highlighter. And then fifty and thirty. Fifty and thirty. So there's the thirty. Where's the fifty. The fifty's not. Oh there it is. There's a fifty. I guess we picked that one up. Okay. So that should give us again. The dates might be a little off practice problem. Bear with me. I'm going to give you an idea here. So we're going to say that that's going to be the outflows of the two thousand three twelve forty three. Does that match. Two thousand three twelve forty three. You're darn right it does. You're darn right. Forty one three sixty six seventy eight. Is the ending balance then. Which should tie out to my cleared balance. Forty one three sixty six seventy eight. And that's what the statement balance is. So I'm in balance. Note that that is not. Is on my balance sheet. As of October. Thirty first which is thirty four two forty nine forty nine. Because we have these outstanding items in the practice problem. Here and these are probably items that we entered in just as practice. So on these two items in in real life we would say hey look that didn't clear it since last month. And this month it's been two months. And it hasn't cleared. So we probably want to be checking in the following month. Did it clear in the following month. If it did then maybe it's just an outstanding item. Possibly that's more likely to happen. If we wrote an actual physical check. Instead of an electronic transfer which would take longer to clear. So we would want to check those. But if those are legitimate items that we have actually written. Then we can see that we have actually reconciled. We know exactly what the difference is. Which is not there just to figure out the ending balance of cash. It's not there just for us to check these outstanding items. And make sure. That they are. Okay. By seeing if they cleared in the following time frame. Although we will do that. It's also so that we can check all the stuff that did clear off. Now that we we checked it off here. Not only because we want to know that the cash is correct. But because all of those transactions have another side to them. And in part creating the entire income statement. And so the fact that we have all the activity helps us to to create the income statement helps us to build a history of what has happened would be the idea. So that means that you don't want to hit the reconcile finish button here until this gets to zero. It should be exactly zero. You might say hey it's only like five dollars off. It's only a thousand dollars off. That's immaterial in my business because I make money. Or whatever. Right. But that it would be immaterial maybe with cash. But that one dollar off could be. Like 20 deposits and 40 checks that actually netted out to be off to a dollar. Which doesn't make a material difference in cash. But if you if you don't have 20 deposits and 40 checks in the system in terms of the activity your income statement is going to be off because the other side of the transactions are going to be off. That's what we're kind of looking for. So any variant from zero the the amount of checking or verification or internal control goes down a lot. And you should be able to get it basically at zero because again if it's on the bank statement then it should be in your books. And if it's not you should change your books most likely to tie into the bank statement unless the bank statement you know is wrong. So it's a little tedious to do but if you had all of your books created from the bank statements it'll be really easy because you could just it'll be at zero automatically most likely. And if it's not that way if you have a more full service accounting system little tedious to check them all off but well worth the time typically because it's a huge internal control this combined with the double entry accounting system are pretty good you know internal controls even for a small business to have some confidence and assurance that at least everything has been put into the system in some way. So let's go ahead and finish it up. Finish it. Your reconciliation is complete. I'm going to say done. And then we could go into the history here and we've got our two reconciliations now. So let's go to the second one that we just created. Let's see what has been created. Now notice that when we did that process that's the process of reconciling. This is the reconciliation the actual end product. So now we're going to go back through that and say OK the statement balance twenty thousand five five four time out to the beginning balance here twenty thousand five five four. This is not really what I consider the bank reconciliation but it's on the report just kind of recapping two thousand one two thousand three twelve forty three two thousand three twelve forty three here. And then we have the activity of the twenty three one twenty four forty one and there's the twenty three one twenty four forty one ending balance the forty one three sixty six seventy eight. And so if I go back on over there's the forty one three sixty six seventy eight of that being the cleared balance on the bank statement not the book balance because the book balance according to our balance sheet is thirty four two forty nine forty nine. And if I go back over here that's this number three thirty four two forty nine forty nine. The difference the reconciling item meaning the bank reconciliation is actually right here between these three numbers is that seven thousand one one seven twenty nine. However these unclear transactions in one lump sum number is not sufficient. I want to know what those transactions actually are so I could verify them so we could go into the activity this first activity not giving us much more new detail because it's basically on the bank statement same with the deposits here but the unclear transactions that's what we're looking for that's what we want to see because this is this is what the actual difference is so so there's that seven one one seven twenty nine and it's comprised of these two items so now I could go back in and see if those two items are clearing and the following month and if they're legitimate items and that's useful but once again that's not the only reason we do the bank reconciliation we're also being able to say hey that's exactly what the difference is between what the bank says and what my books say giving me verification over all the other transactions that are in the system making me more confident about my actual balance not just because it ties out to what's in the bank or because I know what the difference is between that but but also because again it confirms the other side of all the transactions all the transactions that have been entered the detail and the detail is necessary to create say an income statement which is a timing statement so that's why the bank reconciliation very very important you might want to save these because if someone went back in you can imagine if they went back in and deleted say a deposit or something that had cleared if your bank reconciliation adjusted to take into consideration that deleted deposit or check that you already reconciled your reconciliation would no longer be reconciled so I think these reconcilations will be static in the system which is what they need to really be even if someone deletes the prior data and you want to keep that in mind because if something happens if delete if data in the past gets deleted you want to have the bank reconciliation in place because that can help you to kind of figure out piece back together what it should be