Keeping proper financial records is essential when running a business. In fact, one of the most common reasons why small businesses fail is because of poor accounting practices. We’re only human, however, and as humans we make mistakes on occasion. If you accidentally entered the wrong transaction in your Qucikbooks account, you’ll need to clear that transaction so it doesn’t adversely affect your books. So, how exactly do you clear a transaction in Quickbooks?
To clear a transaction in Quickbooks, log in to your account and click Banking > Registers. Next, click the “Register Name” drop-down menu, select the bank account associated with the erroneous transaction and click “OK.”
Quickbooks will now show you a list of all transactions associated with that bank account. Scroll through this list until you find the one you want to clear, at which point you should click to highlight it. Next, click the line between the “Deposit” and “Payment” amount. Depending on whether this transaction has been reconciled, the field here will either contain the letter “R” or the letter “C.” If it’s been reconciled, it will be “R.” If it’s been cleared, it will display “C.” To change the status from reconciled to clear or vise-versa, simply click the field again. For instance, if the field currently displays “R,” clicking it will change it to “C.” When you are finished, click “Save” to save your changes.
Of course, it’s important to understand the differences between a cleared transaction and a reconciled transaction in Quickbooks. Basically, cleared transactions are financial transactions that have already hit the bank, credit card or other financial institution but haven’t been reconciled in Quickbooks. As previously stated, they are marked by the letter “C,” indicating the respective transaction has been cleared. In comparison, reconciled transactions have already been reconciled at the end of the month. To put it simply, cleared transactions become reconciled transactions after the business owner or account has performed the end-of-month reconcilation process.
Financial transactions in Quickbooks can be marked reconciled in two ways. The first method is listed above, which involves manually marking the transaction as reconciled. The second method — also the preferred method — involves using the Quickbooks reconciliation process. Both methods, however, will allow you to mark a transaction as reconciled.
Following the steps outlined above will allow you to clear transactions in Quickbooks.
Did this tutorial work for you? Let us know in the comments section below!