How to Reconcile Your Bank Accounts in QuickBooks Online
Reconciliation is the step where you make sure the transactions in your QuickBooks Online file actually match what happened in your bank and credit card accounts. Until you've reconciled, you don't really know if your books are right. You're just assuming.
It's also where errors, missed transactions, and the occasional bank weirdness show up. Duplicate charges, a deposit that never got recorded, a subscription you forgot about. Reconciling is how you catch any of that before it compounds into a bigger mess.
On the question of how often to reconcile: monthly, every month, for every bank and credit card account. I've written about why monthly is the standard if you want the full argument. This post covers the mechanics of actually doing it, plus what to do if you've let it slide for a while.
Check where you stand
First, see how recently each of your accounts was reconciled. In QuickBooks Online, click the gear icon in the upper right and choose Reconcile from the Tools menu. Click the Summary button on the right side of the screen, and you'll see the last reconciliation date for each account.
If you're caught up through the end of last month, you're good. If the last reconciliation was three, six, eighteen months ago, that's fine too. It's just information. Being behind on reconciliation doesn't mean anything about you. It usually means the task never had a dedicated slot in your routine, and that's fixable.
Reconciling one account, one month at a time
Here's the process. You'll repeat it for each bank and credit card account you have.
From the Reconcile screen, pick the account you want to work on from the dropdown. You'll need your bank statement for the period, because QBO will ask for two things: the ending balance and the ending date from the statement. Enter those and click Start reconciling.
QBO will show you a list of every transaction in that account for the period. Your job is to go through and check off each transaction that also appears on your bank statement. When every statement transaction has a match in QBO, the Difference field in the upper right will read $0.00 and a green checkmark will appear. That means you're balanced, and you can finish the reconciliation.
If the Difference field isn't zero, something is off. The most common causes are a transaction in QBO that isn't on the statement (or vice versa), a duplicate entry, or an amount that was typed in wrong. QBO will let you save an unfinished reconciliation and come back to it, which is useful if you need to dig around.
If you're multiple months behind
Start with the earliest un-reconciled month and work forward. Don't try to do it all at once, and don't try to do the most recent month first. Reconciliations need to happen in order, because each month's ending balance becomes the next month's starting point.
Set aside an hour or two, open your statements (most banks let you download PDFs going back at least a year), and work one month at a time. The first couple are slow. After that, the pattern gets familiar and each month takes less time.
When to hand it off
If you're more than six months behind, or if your QBO file has bigger problems than reconciliation alone will fix (uncategorized transactions piling up, accounts that were never set up right, tax years that were never properly closed out), this is worth handing off. Book a free call and we can talk about what the cleanup actually looks like. Most of my biggest clean-ups started with a client telling me they'd "fallen a little behind." There's no judgment here. It's just work, and I'm happy to do it!