Whether using a manual or a QuickBooks process, the bank reconciliation is essential to verifying the accuracy of cash account balances. It is equally important to preserve the bank statements and reconciliation reports that document this process. Because most business transactions include cash, the potential for error is greater here than anywhere else.
One of the most common problems with the QuickBooks bank reconciliation is that the beginning balance does not match the opening balance on the bank statement. The Beginning Balance displayed in QuickBooks equals the total value of previously cleared transactions.
If you alter or delete a previously cleared transaction, the Beginning Balance will differ from the previous bank reconciliation. The user will get a warning message similar to below when the attempt to change or delete a reconciled transaction.
To investigate a Beginning Balance variance, choose Locate Discrepancy in the Begin Reconciliation window.
Then click the Discrepancy Report button to display a report of changes to previously cleared transactions. If that report does not include what you are looking for, try researching the discrepancy under the Previous Reports button. This option will allow you to view the reconciliation reports as they were at the time of the reconciliation and as they are now (including changes).
If all else fails, you can click the Undo Last Reconciliation button. Undoing the previous reconciliation unclears all the transactions for that reconciliation period, allowing you to begin the bank reconciliation process again.
Another problem occurs when you click the Reconcile Now button before you actually complete the bank reconciliation process. QuickBooks creates an adjustment for the difference between the cleared balance and the ending balance and posts the difference to the Reconciliation Adjustment account.
This only creates future problems for the accountant, as he/she will still have to locate and resolve the problem prior to preparing a financial statement or tax return. A valid reconciliation should result in a zero amount in the Difference field.
Once the reconciliation is complete, QuickBooks will save the bank reconciliation report as a .PDF file. This static report will be useful if there is ever a need to troubleshoot differences in the beginning balance. Be sure to save or print this report.
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