As most professional accountants know, reconciliation is an essential step in maintaining healthy financial records. Basically, this involves matching the transactions that you enter in your accounting software with the transactions displayed on your financial accounts. If you entered the transactions correctly, they should be the same. If you didn’t enter them correctly, however, they will be different. Assuming you use the Quickbooks accounting software, you can easily reconcile your credit card accounts in just a few simple steps.
Before starting, it’s recommended that you create a backup of your Quickbooks company file. It’s always a good idea back up your account before making any major changes. Hopefully, you won’t need this backup. But if something goes awry, you can restore your Quickbooks account back to its original, working order using this backup copy.
To reconcile your card card accounts, log in to Quickbooks and click the gear icon at the top of the screen, followed by “Reconcile” under the column titled “Tools.” From here, click the drop-down menu and select the credit card account that you want to reconcile, followed by “Reconcile Now” to begin the process.
Next, you’ll need to review your account statement for that credit card. If you’re reconciling a credit card for the month of January, for example, look at the card’s January statement, which should reveal all debits and payments associated with the account.
In Quickbooks, click the drop-down menu and enter the end date for your credit card statement as well as an ending balance, followed by “OK.” Now comes the fun part: matching the expenses. Assuming you followed the steps previously mentioned, you should see a reconcile window in Quickbooks. Here, you can match each transaction in Quickbooks with the transactions listed in your credit card statement. When you see that two transactions match (which they should), click the box to the right side. This essentially verifies the transaction by telling Quickbooks that it’s also displayed in your Account statement.
Hopefully, you’ll see a difference value of $0 at the bottom of your reconciliation report, indicating that all transactions entered into Quickbooks were displayed in your credit card statement. If a particular transaction didn’t match, however, you should correct or remove it from Quickbooks. Remember, Quickbooks should accurately reflect all transactions displayed in your account statement. Otherwise, your books won’t be correct.
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