Banking in Quickbooks
the reason and the what I wanted to do in the segment before I got too far gone was the reason I created some checks is so that I could go to banking. Let's go to banking. We haven't done that yet, but we haven't done it in the segment. So I get rid of that and I get this thing that says accepted and unaccepted downloadable transactions. So my point here is that if you want to reconcile your bank account going to transactions, banking is not the path you go to reconcile. Okay, instead. Well, reconciler, I see it. Well, let's see what happens when I could reconcile. Okay, so it says there is no reconciliation History to search, since there hasn't been reconciled before. This is the first month the bank was. The account was opened because the first month of companies in business, that's important, because if you've got transactions from past month, you wanna pull that into your bank Reconciliation. Obviously, outstanding checks from past months deposits that you posted on on December 31s...
t that didn't hit the bank until January, and now you're reckon selling January. Okay, please note, cause Jackie o mentioned she had the friend with multiple checking accounts, which accounted you reconcile ing. I've only got checking. So again, I went to the wheel and I went to reconcile. All right, All right. Reconcile. Now I wonder what will happen. Okay, start reconcile ing. It asked me to do a couple of things, and what it's asking me to do is to enter information from my bank statement. They may not be in my accounting records yet. Okay. Two listed here. Enter the following information from your statement. The statement ending date, January 31st I may get now. I won't get an error message because it doesn't know that I'm not in the end January yet. Beginning balance. I'm gonna put zero. We didn't have any money in the business until we made that transaction to fund the business in January. Ending balance. I'm gonna put a number in there because I think it's gonna force me too. So what am I doing? I'm taking a look at the bank statement. The ending date is 1 31 the end of the month. I didn't have any beginning balance for January. I'm gonna put in an ending balance. That's on the bank statement. Okay. Service charges and interest earned, if any. Well, let's just put something in $ on January 31st. Already. Call it a bank charge. I earned $20 interest. I recorded it in. My accounting records are in my It was recorded in my bank statement. 1 31 interest earned the point here being these two transactions right here. We may not be recorded in your accounting records. You may not record him until you get the bank statement from the bank. Okay, so we're reconcile into checking account 12. 31 is the ending date of the statement. The ending balance and this is But this is different from the ending balance we have on the books. Okay, Just to let you know at a $5 service charge on the 31st I may not have recorded in my It's OK if you guys don't want to record these charges until you until you reconcile your account. That's okay. I'd prefer that you try to record him sooner than later. If you know, you got a bank charge coming for the month, right? Yes. Of dollars, dollars, dollars. Does not every dollar sign. I understand. So if you know this is coming, if you know you're gonna get a $5 bank charge, I'd prefer that you enter it into QuickBooks before you do your bank statement. If you know you're gonna earn 20 bucks, I'd prefer you put it in your QuickBooks as it as a journal entry before you get your banks. Did you see what I mean? I would not wait for the bank statement if you could help it. Let's get it done sooner. What if I hit? OK, here's what happens. And this is the great thing about QuickBooks. I think we've got checks and payments here on the left. We've got deposits and credits here on the right. Okay. Checks and payments. Outgoing on the left, deposits on the right. Now you have the main part of your reconciliation down here at the bottom, which reconciles from the books what you have in QuickBooks to the bank. Okay. Now, I've got a big, monstrous difference between what the QuickBooks says and what the bank says, because what I did was I loaded in a statement that said $5000 as an ending balance one check one deposit. I've got a big difference here of 49. 49 85. Okay, It's not perfect. But what I want to explain without doing it perfectly is when you get your bank statement, you're gonna look at the bank statement and your QuickBooks has provided for you, and you're going to start clicking off the things that posted in the bank statement like this. Okay, I Mr say everything clear just to make it easy. Now you can see that even with everything clearing, I still have a difference between the ending balance on the bank statement 5000 and the what they call the cleared balance, which is what's in my accounting records in QuickBooks. That's clear. That is, it's on the bank statement. My quikbook balance, if you will. Assuming that everything cleared is $1350 lower than the bank statement. Because I just made up the number. What happens when I had finished? Now it says there is a difference of $1350 it gives you some heads up here between the total of the selected transactions. Remember, I cleared everything and the ending balance. What could it be Click Add adjustment to enter the adjusted account balance. The adjustment will be posted to the reconciliation discrepancies or cancel to return without making an adjustment. Okay, when we do, read it one more time, Click. Add adjustment to adjust the account balance. The adjustment will be posted to the reconciliation discrepancies. Yeah, cancel to return without making an adjustment. What I would suggest you do is, well, let me hit at adjustment, see what happens. Okay? It takes me to a screen that says, Here's my for the month And in January 31st and reconciled today, I'm assuming I wouldn't do any business the rest for the next seven days. The ending balance in my checkbook is $1350 difference in the ending balance. On my bank statement, checkbook is $1350 different from what's on the bank statement. Okay, this auto adjustment is the difference between what we call in accounting the bank balance in the book balance. What if I click on it? It gives me essentially my bank reconciliation. Okay, A lot of detail there. You can print it If you want again. You may want to print this and file it so that if there is an audit or if there is a if you want to show your financial records to a potential investor, you've got a hard copy of the bank wreck, and you can have the bank statement and the bank reconciliation. Old one. Okay, what if I scroll down? That's about it. So what I did was I reconciled the bank statement. I have an adjustment of $1350 that's hanging out there unresolved. And if you go to recent transactions, it says deposit adjustment. $1350 which is saying to image photography. The bank says you've got $1350 more dollars than you think you do, so let's click on the adjustment. The system assumes that if your QuickBooks or too low, you must be missing a deposit. Let's say we are missing a deposit cause I want it post the adjustment and see what happens. Okay, one more time. This the QuickBooks system assumes that there's a deposit that you were missing because the bank says you're $ to low after reconcile ing you follow me. Okay, so I'm going to say that I missed a payment from Parkside. The account it goes into is going to be an income account called sales. It was for the, um, January party. They sent me a check, and it's for $1350. Okay. And it says but slide down. The memo says, reconcile an adjustment. And I'm going to say customer deposit not posted to accounting records just to remind myself. Okay, what does this cash goes? Cash back goes to cash back memo. None of it involved cash. Specifically, It was a check. You've got some other memos. You've got attachment you could do down here. Blah, blah, blah. Let's do save and close and see what happens. So we have a deposit adjustment. Now, What it's gonna do is it's gonna ask you to reconcile all over again. Now that you have that correction made, it'll all work out. Okay? Once you've made the adjustment for the thing that you missed, it will all work out. Ok? I'm not gonna go through the whole thing again, but to give you some idea, so let me say a couple things on cash again. Reconcile your bank account within five days of the bank statement. Please do put your cash activity in QuickBooks. If you reconcile when you have an error, go ahead and run the adjustment like I did and click. Yeah, keep the adjustment. That amount will sit there, and your bank account will be unreconciled until you fix it, so it'll be isolated there until you fix it. Now, one more thing you will not be able. I don't believe to reconcile February until you get January fixed, which is good. You don't want to go into the next month and try to reconcile until you get the other month fixed. I am aware of a situation where a fairly large discount store that's in the south and you would know the name. Some friends of mine who worked in retail at Macy's went that down there to be their accountants. They had a $1 million unreconciled difference in cash, $1 million that they had blown off and hadn't found the difference for a $1,000,000 difference in cash. I say that because this process of reconcile ing it's tedious, it requires focus. It can get away from you very, very quickly, the horse could get out of the barn, and this thing can get away from you very quickly. And suddenly it's three months down the road and you have no idea what's going on your cash account and I I am pleading with you not to do so.