How to Reconcile Business Credit Card Accounts in QuickBooks Online


Welcome to the Fit Small Business QuickBooks Online training course In this lesson we're going to cover how to reconcile business credit card accounts in QuickBooks Online

To follow along with me login to your QuickBooks Online account now, or click the link below for a free 30-day trial of QuickBooks Online You can also click this link to access our full QuickBooks Online course and other helpful resources Let's get started Similar to your personal credit card accounts, it is important that you reconcile your business credit card accounts on a monthly basis Reconciling is the process of matching the transactions on your credit card statement to what you have recorded in QuickBooks

Preparing business credit card reconciliations on a regular basis, will help to ensure any discrepancies between your records and the credit card company's are resolved in a timely manner, and that timely notification of any fraudulent transactions take place So for example if you notice transactions listed on your credit card statement that you did not authorize, you can notify the bank as soon as possible so that they can investigate In addition, reconciling your credit card transactions in QuickBooks helps ensure every transaction is noted in your books This helps keep your financial statements like profit and loss and balance sheet up to date Click the links below to learn more about the profit and loss and balance sheet reports

Before we go into the reconciliation steps, be sure that you have your credit card statement handy for the credit card that you want to reconcile We will refer to the credit card statement often during this process Now let's go ahead and walk through the steps to reconcile your business credit card account in QuickBooks Online From the home page go ahead and click on the gear icon located in the upper right hand corner And below the tools column the third option is reconcile

So go ahead and click on that The first thing you want to do is select the account that you would actually like to reconcile So from the drop-down we want to go ahead and select the credit card account that we want to go ahead and reconcile One of the things that you might see is a notification that your beginning balance of your account is off So what this means basically is since the last time you reconciled this account there was an amount that had previously been reconciled that was changed, and that could either be the dollar amount was changed or the date was changed

So what's nice is you can actually click this link here that says 'we can help you fix it' and go ahead and follow the steps to fix that out of balance before you start reconciling the current month From your credit card statement you want to go ahead and enter the ending balance that appears on that statement, and also your ending statement date in this field here Once you've done that you can click the start reconciling button at the bottom Now here is the new and improved reconciliation tool that Intuit released about a couple of months ago now Alright so let's talk about some of the information that you will see on this screen

The statement ending balance here: this is the amount that we entered in the previous screen from the credit card statement Be sure to double check this amount because it will cause you to be out of balance if it is incorrect Your beginning balance here as we discussed earlier is basically your ending balance from last month's credit card statement This will automatically be populated by QuickBooks for you The cleared balance is going to change as you start to reconcile items

So as you select your items in this screen that you want to reconcile, this dollar amount will continue to change The charges dollar amount will increase as you select credit card charges from the transaction section down below And your payments as well will also change as you select payments from the transaction section below The difference here is automatically calculated by QuickBooks, and it's the difference between your statement balance and the cleared balance Our goal is to get to a difference of 0

Down in the transaction section it is separated by charges, payments, and all transactions So as you can see you can easily filter between the type of transactions that you want to take a look at, or you can look at all of them at one time If you are new to reconciling, I recommend that you reconcile the area with the least number of transactions first Our goal is to make sure that every charge and payment listed on the credit card statement is marked as cleared in this reconciliation window To mark an item cleared you want to simply click on the radio button to the right of that item in this final column

Let's start with our payments first We've just got three payments here, you can select them individually or you can go ahead and just click the radio button at the top to mark them all as cleared if they appear on your credit card statement And it'll just confirm that you want to select all when you do that so we'll say yes So once you've selected your total payments you want to verify that the total payments that you've cleared here in this window matches what total payments add up to on your credit card statement So in this example our credit card statement has payments totaling $1,240, and the items that we have marked as cleared in this reconciliation window also total $1,240

So in this situation our payments do match and we can move on to charges However if your payments do not match, stay with me because I'm going to share some troubleshooting tips in a few minutes on how to fix the out of balance So we'll go ahead and repeat the same steps for charges And so with charges you'll probably go one by one and select items here So we'll go ahead and just assume all of our items are on our statement and confirm that yes to select all

And then again you want to make sure that the total amount of charges that you have marked as cleared in QuickBooks, this $1,86915 is in fact what appears on your statement for total charges Once all charges and payments match the credit card statement, you should have a difference of 0 here which is our goal Behind the scenes, QuickBooks will mark all of the charges and payments that have been reconciled as cleared So we'll go ahead and click the finish now button to generate the credit card reconciliation report which we'll take a look at next

Alright here is our credit card reconciliation report So the top section here is a summary of the items that cleared for charges and for credit card payments And then down below is each individual item that cleared the credit card statement for this month Now I want to share with you a couple of tips when it comes to reconciling your credit card accounts Tip number one: it's important that you save all credit card reconciliation reports for every credit card account

To do this you can create a folder for each credit card account and keep these reports in the folder For more tips on how to organize key financial reports and humans check out our small business bookkeeping guide You can click the link below to access this guide Tip number two: credit card reconciliation reports are one of the top five reports that auditors will request from you during an audit In my experience as an auditor, if you are not able to provide these reports that audit may not go well for you

Now let's talk about 8 troubleshooting tips for reconciling credit card accounts in QuickBooks Online You want to go ahead and try some of these tips if you're having trouble getting to the 0 difference Tip number one: if possible narrow the search down to transaction type Figure out if you are out of balance with the charges or with the payments If you're out of balance for both charges and payments, which is tip number two, tackle them separately

In other words balance your charges first and then move on to your payments or vice versa Tip number three: look for the exact dollar amount that you are off For example if your difference is $50 then look for a transaction for this amount on your credit card statement, and then look for this amount on the charges section and the payments section of the reconcile window Tip number four: triple check the information that you entered from the credit card statement and that would be your ending balance and the ending statement date Remember, either one of these — if either piece of information is incorrect this will cause you to have an out of balance

Tip number five: check to see if there are any transactions in the reconcile window that you did not select If the transaction is on your credit card statement, then make sure the radio button next to it is selected Tip number six: if you do have a transaction on the credit card statement that is not in QuickBooks, then you will need to add it to QuickBooks For a missing charge, enter it as you normally would In our how to manually enter business credit card transactions lesson we walk you through step by step on how to enter credit card transactions in QuickBooks

Click this link to access this video tutorial If the missing transaction is a payment, enter it as you normally would In our how to enter credit card payments lesson we walk you through step by step how to enter credits into QuickBooks Click this link to access this video tutorial Tip number seven: take a break

If you've been at it for a while and you need a break clicking the finish later button will save the work you've done so that you can easily pick up where you left off Sometimes taking a breather and coming back and help you spot what's causing the difference And finally tip number eight: while it might be tempting, I recommend that you don't click that reconcile button until you have a difference of 0 The problem will not go away The difference will just carry over to the next month until you figure it out

If you do happen to hit the reconcile button by accident and you've not figured out the difference, QuickBooks will record the out of balance amount in a miscellaneous expense account called 'unreconciled discrepancies' Of course, if we're talking a small amount, for example $5 or less, then it might be worth your while to move on At the end of the day you get to determine what amount you're comfortable with Reconciling your credit card accounts does not change your financial statements However in the credit card register, reconcile charges and payments will be marked with the letter R as you can see here

Typically, once a credit card transaction is reconciled you do not want to make any changes to it This is primarily due to the fact that you have balanced it with your credit card statement You can edit the account if you need to So for example if you categorized something as a registration fee, and it should have been office supplies, you can definitely make that type of change without impacting your financial statements But you do not want to make any changes to the amount field or the date field

If you do it can cause your financial statements to be inaccurate and you will no longer be in balance with your credit card company That wraps up the lesson on how to reconcile business credit card accounts in QuickBooks Online To access our full QuickBooks Online course or any of the other lessons in this series, click this link You can also find a link below this video for a free 30-day trial of QuickBooks Online If you have feedback about this course or if you have any questions please leave a comment below

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