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How to Fix Reconciliation Discrepancies in QuickBooks?

QuickBooks is an excellent accounting software that helps many small and middle-size business owners meet their business goals. It includes several features and tools that make it one-of-a-kind software.

One of the features of QuickBooks is Reconciliation in QuickBooks, which ensures all of your business transactions are perfectly displayed on your account. But sometimes, there may be some reconciliation discrepancy that can affect productivity. If, after reconciling your account, it shows some different balance in your next reconciliation, then your QuickBooks account has reconciliation discrepancies.

Here in this article, you will know more about reconciliation discrepancies and how to fix them.

What is Reconciliation Discrepancy?

While reviewing your accounts in QuickBooks, all your account transactions should match with the bank statement. If both accounts are in sync, they are accurate and perfectly balanced. In simple words, after the reconciliation of the accounts, the difference between bank statements and QuickBooks accounts should be zero. If it is not so and there is some leftover, then there is some discrepancy in your account. This is what you can call reconciliation discrepancy.

Why does Reconciliation Discrepancy Occur?

Reconciliation discrepancies in QuickBooks accounts occur because of the following reasons:

  • Wrong opening or closing balance on the reconciled page.
  • Modification or deletion of earlier reconciled QuickBooks account transactions.
  • Sometimes conversions of company files from QuickBooks Online to QuickBooks desktop can lead to issues in your reconciled transactions.
  • Overwritten data and reconciled transactions during the restoration of company files from backup.

Steps to Follow to Fix Reconciliation Discrepancies in QuickBooks

Step 1: Reviewing opening and starting balances

If you have not checked, ensure all your opening and starting balances are proper. If they are accurate, you can look for other problems to sort them out.

Step 2: Check for any changed, added or deleted transactions

There are many reports present in QuickBooks that can show you in anything is changed, added or deleted.

Run Reconciliation Discrepancy Report

Running this report will show if any transactions have changed since the last reconciliation. They are arranged based on the statement dates.

  • First, open reports menu. In the Banking option, choose Reconciliation Discrepancy.
  • Choose the account which you are reconciling and then choose Ok.
  • Go through the report and look for discrepancies.
  • Before editing the transaction, talk with the person who made the changes.

Run Missing Checks Report

Running this report will show you the missing checks. These can be the reasons that are responsible for the wrong reconciliation balance.

  • First, open the Reports menu, and in Banking, choose Missing checks.
  • Choose the account that you are reconciling and then choose OK.
  • Go through the report and check if any transactions are not in the bank statement. They should not be on the reconciliation report if they are not in the bank statement.

Run Transaction Detail Report

This will show if any of the transactions have been changed.

  • Open the Reports menu and select Custom Reports and choose transaction detail.
  • Choose The Display tab.
  • In the option, Date from, choose the earliest Date in QuickBooks for getting the account.
  • In the option, Date to, choose the Date when you did the last reconciliation.
  • Now go to the tab Filters.
  • Now in the Account option, choose the account that you are reconciling.
  • In the Entered/Last modified option, put the Date from to Date of recent reconciliation. After that, put today’s Date on the Date to option.
  • Choose OK to run the report.
  • Check if any discrepancies or transactions do not match your bank statement.
  • Talk to the person who made the changes. There might be some reason behind the change made. After knowing about it, edit the transaction as per requirement.
  • If you need help, you can reach out to your accountant.

Step 3: Check for reconciliation modifications

Users sometimes make reconciliation adjustments so that their QuickBooks account matches the band records. But it is not advisable to do this without the accountant’s guidance. The adjustment will not fix any errors; instead, it can cause some problems.

  • Go through the account and ensure no one made any wrong adjustment.
  • Now open the Lists menu and choose Chart of Accounts.
  • Open reconciliation discrepancies account.
  • In the option from the Date, put dates of some of your last reconciliations.
  • If you find any adjustments that make the account balance wrong, try to talk to the person who adjusted it. Ensure your corrections are not incompatible with the adjustment.
  • Complete reconciliation.
  • When all things are fixed, you can finish the reconciliation.

If you do not find any problems in your account, you must undo all your previous reconciliations until the opening balance is correct.

Suppose somebody edited or deleted any transaction years ago. In that case, you will have to undo all your reconciliations of the last some years to find where the opening balance was correct.

FAQs about Reconciliation Discrepancies in QuickBooks

What are Reconciliation Discrepancies in QuickBooks?

Reconciliation discrepancies are those in QuickBooks that impact the data that is stored and managed in QuickBooks. This, in turn, affects the decision-making process of businesses.

Is it possible to fix Reconciliation Discrepancies by yourself?

No, if you get any reconciliation discrepancies, edit it only when your accountant is there.

How to check for Reconciliation Discrepancies in QuickBooks?

To check for reconciliation discrepancies in QuickBooks, it is often recommended to run reports and try to find out where the discrepancies are. Being a user, you can run reports like transaction detail reports, missing check reports etc.

What Causes Reconciliation Discrepancies in QuickBooks?

Some of the primary reasons that cause reconciliation discrepancies are:

  • Adding data that is already there
  • Deleting important data
  • Forced reconciliation
  • Making changes in the original data

Also Read – Quickbooks to Zoho Books

Conclusion

So, one of the first things to do when you experience reconciliation discrepancies in your QuickBooks account is to find the reason for the issue. Then execute all steps as described above to fix the problem. If none of the above steps works, damaged data in the company file might have led to discrepancies.