Reconciliation matches your QuickBooks records to your actual bank statement
Reconciliation is the process of comparing the transactions QuickBooks shows in your checking account against the transactions your bank shows on your statement. When you reconcile, you're confirming that every deposit, withdrawal, and fee matches between the two records. If they don't match, reconciliation helps you find where the difference is.
Most people reconcile monthly, using their bank statement as the source of truth. QuickBooks walks you through the process step by step, and you mark off each transaction as you verify it. Once everything balances, your QuickBooks account is considered reconciled for that period.
If you've connected your bank account to QuickBooks through a third-party link, some transactions may download automatically. Reconciliation still works the same way — you're just confirming that what downloaded is accurate and complete.
Key Takeaways
- Reconciliation compares your QuickBooks checking account balance to your bank statement balance and marks off each transaction as verified.
- You'll need your current bank statement and access to QuickBooks to start the reconciliation process.
- QuickBooks shows you uncleared transactions (ones not yet on your bank statement) separately so you can account for timing differences like pending deposits or checks.
- If your balances don't match after reconciliation, QuickBooks has a built-in tool to help you find the difference by amount or date.
Gather your bank statement and open the reconciliation window
Pull your most recent bank statement — either the paper version or the one you download from your bank's website. You'll need the statement date, the opening balance, the closing balance, and the total of any bank fees or interest charges shown on that statement.
In QuickBooks, go to the Banking menu (or Accounting in some versions) and select Reconcile. QuickBooks will ask you which account you want to reconcile — select your checking account. The reconciliation window will open and show you fields for the statement date, opening balance, and closing balance.
Enter the closing balance from your bank statement into QuickBooks. This is the number at the bottom of your statement that shows how much money was in the account on the statement date. QuickBooks will calculate what it thinks the balance should be based on all the transactions it has recorded.
Mark off each transaction as you verify it against the statement
QuickBooks will display a list of all transactions in that checking account that haven't been marked as cleared yet. Go through your bank statement line by line and find each transaction in the QuickBooks list. When you find a match, click the checkbox next to that transaction in QuickBooks to mark it as cleared.
Work through deposits first, then withdrawals. Check the amount, the date, and the description to make sure they match. If a transaction appears on your bank statement but not in QuickBooks, you'll need to add it manually — QuickBooks will prompt you to do this if you notice a gap.
Pay special attention to bank fees and interest. These often appear on the statement but may not be in QuickBooks yet. If you see a fee or interest charge on your statement that isn't in QuickBooks, add it as a transaction before you finish reconciliation.
Handle timing differences between QuickBooks and your bank
Some transactions will appear in QuickBooks but not yet on your bank statement. Common examples are checks you wrote that haven't cleared yet, or deposits you made near the end of the month that the bank hasn't processed. These are called outstanding items.
Don't mark these as cleared in QuickBooks. Leave them unchecked. QuickBooks will show them separately in the reconciliation window as "uncleared" transactions. The reconciliation process accounts for these automatically — they reduce the balance QuickBooks expects to see.
For example, if you wrote a check for $500 that hasn't cleared yet, QuickBooks knows to subtract that $500 from its expected balance. When the check clears on your bank statement next month, you'll mark it as cleared during next month's reconciliation.
Resolve differences if your balances don't match
Once you've marked off all the transactions that appear on both your statement and in QuickBooks, look at the bottom of the reconciliation window. QuickBooks will show you the difference between what it calculated and what your bank statement shows. If the difference is zero, you're done — click Finish to complete the reconciliation.
If there's a difference, QuickBooks has a Discrepancy or Find Differences tool. This tool can search for transactions by amount or date to help you locate the mismatch. Common causes are a transaction entered with the wrong amount, a transaction in QuickBooks that isn't on the statement, or a transaction on the statement that isn't in QuickBooks.
Go back through your work: check that you entered the opening and closing balances correctly, verify that the amounts you marked off match exactly, and look for any transactions that appear only once (in either QuickBooks or the statement, but not both). Once you find and fix the error, the balances should match.
What to do if you can't find the error
If the difference is small (a few dollars or less) and you've checked your work twice, the error may be from a previous month's reconciliation. In that case, you can create a journal entry to adjust the balance and move forward. This isn't ideal, but it prevents the error from compounding.
If the difference is large or you're certain the error is recent, contact your bank. Ask them to confirm the closing balance on your statement and to list any pending transactions that haven't cleared yet. Sometimes a transaction posts to your bank account on a different date than you expected, or a deposit takes longer to clear than usual.
You can also temporarily undo the reconciliation in QuickBooks (most versions allow this through the Banking menu), review all transactions from the past two months, and start over. This takes longer but can catch errors that are hard to spot the first time.
Reconcile regularly to catch errors early
Reconciling every month, as soon as your statement arrives, makes the process much faster. If you reconcile only once or twice a year, errors from months ago become harder to track down. A monthly routine takes 15 to 30 minutes for most small business accounts.
If your bank account is connected to QuickBooks through a third-party link, some transactions download automatically. You still need to reconcile — the automatic download doesn't replace the reconciliation process. It just means you don't have to type in every transaction manually.
Keep your bank statements, even after reconciliation. If a question comes up later about a transaction from three months ago, you'll have the statement to refer to. Many banks keep statements online for seven years, so you can download them again if needed.
Frequently Asked Questions
What if a check I wrote three months ago still hasn't cleared?
A check that hasn't cleared after three months is unusual and may indicate a problem. Contact your bank and ask them to search for it. If the check is truly lost, you may need to stop payment on it and issue a new one. In QuickBooks, you can mark the old check as cleared with a note explaining why, then record the new check separately.
Can I reconcile a previous month if I skipped it?
Yes. Go back to the month you missed, use that month's bank statement, and reconcile it the same way. QuickBooks will let you reconcile any past period. It's better to reconcile months in order so you don't carry forward errors, but you can jump around if needed.
What does "uncleared" mean in the reconciliation window?
Uncleared means the transaction is in QuickBooks but hasn't appeared on your bank statement yet. Common examples are checks you wrote, ACH transfers you initiated, or deposits you made near the end of the month. Don't mark these as cleared — leave them unchecked and they'll clear next month.
Should I reconcile if my bank account is automatically downloading transactions?
Yes. Automatic downloads save time, but they don't replace reconciliation. Downloaded transactions can have errors, and your bank statement is still the official record. Reconciliation confirms that what downloaded is complete and accurate.
What if I find an error after I've already finished reconciliation?
You can undo the reconciliation, fix the error, and reconcile again. In most QuickBooks versions, go to Banking or Accounting, find the reconciliation history, and select the option to undo. Then correct the transaction and reconcile again. This resets that month's reconciliation so you can do it over.