How to Reconcile in QuickBooks Online: A Step-by-Step Guide

Your bank says $43,218.47. QuickBooks says $42,870.85. The difference is $347.62, and your bookkeeper just shrugged.

I’ve seen this pattern a hundred times. You skip reconciliation for two months, then the gap keeps growing. One missed fee. A duplicate entry from the bank feed. A check that cleared differently than expected. By month six, nobody has the patience to trace back.

Here’s the truth: QuickBooks Online does the heavy lifting for you. When you do it monthly, reconciliation takes 20 minutes tops. The last client who ignored it for six months spent four hours untangling the mess.

I’m going to walk you through the whole process. By the end, you’ll know exactly what to do when those numbers don’t match.

What Reconciliation Actually Does in QBO

Reconciliation is simple: you’re comparing two numbers. The bank says you have X. Your books say you have Y. You make them match.

The bank statement shows what the bank processed. Your QuickBooks register shows what you recorded. These won’t always be identical because of timing. A check you wrote three weeks ago might still be sitting in someone’s desk drawer. A deposit you made on Friday might not post until Monday. That’s normal.

QuickBooks imports transactions automatically through bank feeds. That’s helpful, but it’s not foolproof. The feed can miss things, duplicate them, or slot them into the wrong category. Reconciliation is where you catch those problems before they become actual problems.

Do this monthly. That’s all. Monthly reconciliation is the one habit that keeps your books clean, and it takes less time than getting a coffee in the Galleria.

Before Starting: What to Have Ready

Pull your materials before you open QuickBooks. Five minutes of prep saves you 15 minutes of hunting around later.

Bank statement. Download the PDF from your bank’s website. You need the ending date and ending balance. If you’re banking with Frost, Chase, or Comerica in Houston, the statement posts the next business day usually.

Last month’s reconciliation report. Open QuickBooks and check what the ending balance was last month. Your beginning balance this month needs to match that ending balance. If it doesn’t, something got edited or deleted, and you need to find it first.

Your bank feed cleaned up. Make sure everything for this month has downloaded and is categorized. Any uncategorized transactions sitting in the feed won’t show up when you reconcile, and that’s where your discrepancies come from.

Step-by-Step: Reconciling in QuickBooks Online

Step 1: Open the Reconciliation Tool

Go to Settings (gear icon) > Reconcile. You’ll see a list of all your bank and credit card accounts.

Click on the checking account you want to reconcile. Start with your main account.

Step 2: Enter Statement Information

QuickBooks wants three numbers:

• Statement ending date: The last day of the statement you’re working with
• Statement ending balance: The bottom line from your bank statement
• Beginning balance: QuickBooks fills this in automatically

Check that beginning balance against your bank statement’s opening balance. If they match, go ahead. If they don’t, you’ve got a problem. Something from last month got edited or deleted, and you need to fix it before you move forward. More on that later.

Step 3: Review and Match Transactions

QuickBooks shows two columns: Payments on the left, Deposits on the right.

Go through your bank statement line by line. Find each transaction in QuickBooks and check the box next to it. You’re marking transactions as cleared when they match what the bank shows.

Here’s how I do it: sort by amount first. That makes it easier to spot the big transactions quickly. For a high-volume month, use the search box. Watch your dates too, because timing matters. A check you wrote on January 31st might not show up on the statement until February 2nd.

The Difference field at the top of the screen shows you how far off you are. You want that to say $0.00 when you’re done.

Step 4: Identify Outstanding Items

You’ll have transactions in QuickBooks that aren’t on the bank statement yet. Leave those unchecked. This is normal.

Outstanding checks: You wrote the check and recorded it, but the person hasn’t cashed it yet. This happens all the time. A $2,500 check to a vendor in Katy might not clear for three weeks.

Pending electronic payments: ACH transfers and online bill payments you initiated near the end of the month that haven’t processed yet.

Deposits in transit: Money you deposited that hasn’t shown up on the statement yet.

These will all appear on next month’s statement. Don’t worry about them.

Step 5: Record Missing Transactions

Anything on the bank statement that isn’t in QuickBooks needs to go in now. Common ones:

Bank fees: Chase might charge you $10 for the account, or $35 for a wire transfer. They’re always on the statement before they’re in your books.

Interest income: Banks pay interest on some accounts. It’s usually small, but it counts.

Automatic payments: Subscriptions, loan payments, insurance drafts that hit automatically each month.

Bounced checks: A customer’s check didn’t clear due to insufficient funds. It comes back to you on the statement.

ATM withdrawals: Cash you took out that you haven’t recorded yet.

You can add these right from the reconciliation screen or open a separate tab and enter them in the register.

Step 6: Investigate Any Remaining Difference

If you still don’t have $0.00, something’s wrong. I’ve seen this a thousand times.

Transposed digits: Someone typed $1,520 when it should have been $1,250. Look for an amount that’s close to your difference.

Duplicate entry: The same transaction is in QuickBooks twice, maybe once from manual entry and once from the bank feed.

Wrong account: A transaction got recorded in the wrong bank account or a loan account instead of checking.

Modified reconciled transaction: Someone edited or deleted a transaction from a previous month.

Use QuickBooks’ search function and look for the exact discrepancy amount. That usually finds it. You can also use the amount filter to narrow down the list.

Step 7: Finish the Reconciliation

When you hit $0.00, click Finish now. That’s it.

QuickBooks marks everything as reconciled and locks those transactions so nobody can mess with them by accident. It generates a report that you should save. You’ll need it for tax prep and loan applications later.

Common Reconciliation Errors (and What Causes Them)

Beginning Balance Doesn’t Match

This one freaks everyone out. It means something from last month got changed after you finished reconciling it.

Someone edited a transaction that was already reconciled. Or they deleted a check. Or someone backdated a journal entry into a month that was already closed.

The fix: QuickBooks shows you exactly what changed. Find the transaction, correct it, and you’re done. Go forward by locking prior months under Settings > Advanced > Accounting. That way, nobody can mess with old transactions without a password.

Duplicate Transactions

The same transaction shows up twice in QuickBooks. It’s usually because someone entered it manually and the bank feed also brought it in.

The sign: Your balance is off by the exact amount of one transaction. You see two entries for something the bank only shows once.

The fix: Delete one of them. If both are already reconciled, un-reconcile the one you’re going to delete first. Then pick a method going forward: use bank feeds or enter things manually. Don’t do both.

Transactions in the Wrong Account

A check cleared your checking account at Chase, but someone recorded it in your savings account instead.

The sign: You’re reconciling checking and that payment just doesn’t show up anywhere in that account.

The fix: Search QuickBooks for the transaction by amount. You’ll find it in the wrong account. Move it to the right one and continue reconciling.

Voided or Deleted Checks

You voided check number 1247 in QuickBooks, but the bank already cleared it.

The bank statement shows the check went through. Your books say it’s void. Those don’t match.

The answer is simple: put the check back in QuickBooks or reverse the void. The bank statement is the source of truth here.

Bank Feed Matching Errors

QuickBooks auto-matches transactions from your bank feed to entries in the register. Sometimes it gets them wrong.

It might match a $1,500 payment to vendor ABC when the bank feed is actually a $1,500 payment to vendor XYZ. The amount is right, but the payee is wrong.

Undo the match, then match it to the right transaction or add it as new. That’s all.

Reconciling Credit Cards

The steps are the same as checking accounts. The only difference is you’re reconciling a liability instead of an asset.

Go to the Reconcile screen, select the credit card, and enter the statement date and balance. Match transactions the same way.

Credit cards have more transactions than checking accounts most of the time, especially if you’re a restaurant in Sugar Land processing dozens of vendor charges every week. You can see 300 transactions in a single month. If you skip reconciling for three months, that becomes a nightmare.

Reconcile credit cards monthly just like checking. It takes the same 20 minutes and catches fraud faster.

When Reconciliation Reveals Bigger Problems

Sometimes reconciliation uncovers something more serious than a mismatched entry.

Unfamiliar transactions. You see a $5,000 charge to a vendor you’ve never heard of. That could be fraud. Someone could have access to your account who shouldn’t. Call your bank and ask questions. Small business fraud costs companies a median of $150,000 per case, and most of the time it gets caught during reconciliation.

The same error every month. Your bank feed keeps miscategorizing transactions the same way, or an employee keeps entering data incorrectly. That’s a workflow problem, not a one-time typo.

Beginning balances that don’t match for months. You fix the beginning balance one month, then next month it’s off again. That usually means errors go back further than you think, and you need professional help to untangle it.

How Often to Reconcile

Do it monthly. That’s the standard, and it works.

Monthly matches your bank’s statement cycle. You keep the transaction count low. If something goes wrong, you catch it within 30 days instead of six months.

Some businesses with high transaction volume reconcile weekly. An e-commerce company in Cypress processing 500 transactions a month might find weekly reconciliation faster because there are fewer items to match each time.

The IRS doesn’t care how often you reconcile, but they expect your books to be clean. During an audit, clean reconciliation reports show that you had good financial controls. That matters.

Tips for Faster Monthly Reconciliation

Categorize bank feed transactions weekly. Don’t wait until reconciliation time to sort them. When you do reconcile, everything is already in the register and you just verify it. It’s faster.

Set up bank rules. Your rent, software subscriptions, and loan payments hit the account the same way every month. Create rules so QuickBooks handles them automatically.

Lock the prior month. Use the “Close the books” feature in QuickBooks. That way, nobody can edit last month’s transactions without a password, and you won’t get beginning balance surprises.

Reconcile everything at once. Do your checking, savings, and credit cards in one session. You’ll see how money moves between accounts and catch transfer problems faster.

Save that report. You’ll need it for taxes, loan applications, and whenever someone questions your numbers.

When Professional Help Makes Sense

You can handle reconciliation on your own if you’re organized and the account is simple. But some situations call for a professional.

Your books haven’t been reconciled in three months or longer. You can’t figure out why the beginning balance keeps changing. You have five bank accounts, three credit cards, and a loan account all needing reconciliation. You deal with multiple currencies. The same type of error keeps showing up month after month.

A good bookkeeper doesn’t just reconcile your accounts. They find what caused the problem and fix it so it doesn’t happen again. That’s worth paying for. It’s cheaper than spending your own time chasing errors backwards through six months of transactions.

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At EZQ Group, we handle QuickBooks Online setup, reconciliation, and ongoing bookkeeping for Houston businesses in Galleria, Katy, Sugar Land, Cypress, and everywhere else in the metro. Whether your books are current or six months behind, we get you reconciled and set up a system so it stays that way. Learn more about our accounting software services or contact us to get started.