How to Reconcile Balance Sheet Accounts in QuickBooks

Quick Answer: In QuickBooks, use the Reconcile tool for any account that has a statement with an ending balance, which always includes bank and credit card accounts and can include a loan if it appears in the account list. For every other balance sheet account, such as payroll liabilities, prepaid expenses or clearing accounts, open the account's register, compare its balance to a supporting schedule or report, and post a journal entry for any difference.

QuickBooks gives you two ways to prove a balance sheet account. The Reconcile tool ticks individual transactions against a statement, and it is built around bank and credit card accounts. Other accounts are reconciled the old way: read the balance from the register or a balance sheet report, tie it to outside evidence in a spreadsheet, and fix differences with entries. Choosing the method is most of the job.

Which QuickBooks accounts can use the Reconcile tool?

Intuit's help pages describe reconciling bank and credit card accounts. In QuickBooks Online the path is All apps > Accounting > Reconcile, where you choose the account, enter the statement's ending balance and ending date, tick the transactions that appear on the statement and finish when the difference is $0.00, as set out in Intuit's QuickBooks Online reconcile article. In QuickBooks Desktop you go to Banking > Reconcile, confirm the statement date and beginning balance, enter the ending balance plus any service charge or interest, and tick items until the difference is zero; the Desktop version of the instructions mentions other account types too, without listing them all.

The practical test is simple: open the account dropdown on the Reconcile screen. If the account you want is listed and you have a statement with an ending balance for it, reconcile it there. If it is not listed, or there is no outside statement to tick against, use the schedule method below.

How do you reconcile a credit card account in QuickBooks?

Credit cards are the easy case. They behave like bank accounts in the Reconcile tool, with charges in place of payments and payments in place of deposits.

1. Make sure every charge, refund and payment through the statement closing date is entered or matched from the bank feed.
2. Open the Reconcile screen, choose the card account, and enter the closing balance and closing date from the issuer's statement.
3. Tick each charge and payment that appears on the statement.
4. If the difference is not zero, look for charges dated after the statement cutoff that you ticked by mistake, and for interest or annual fees not yet entered.
5. Finish the reconciliation, then record the card payment itself as a transfer or bill payment if it is not already in QuickBooks.

A credit card used by several employees often has sub-accounts per cardholder. Reconcile the parent account against the single issuer statement.

How do you reconcile a loan account in QuickBooks?

Loans fail more often than any other balance sheet account, because a monthly payment is usually entered as one amount when it should be split between principal and interest.

If the loan appears in the Reconcile dropdown: treat the lender statement like a bank statement. Enter its ending principal balance and date, tick the payments and any new draws, and reconcile.

If it does not, or the lender only sends an annual statement:

1. Get the lender's figure for principal outstanding on your reconciliation date, or build an amortization schedule that matches the loan terms.
2. Read the loan balance from the balance sheet report or the loan account's register for the same date.
3. Compare. If QuickBooks shows a lower balance than the lender, the full payment has probably been posted to principal; if higher, payments may be missing.
4. Post a journal entry moving the difference between the loan account and interest expense, with a memo naming the lender statement and period.
5. Fix the source: edit the recurring transaction or bank rule so future payments split principal and interest correctly.

How do you reconcile payroll liabilities?

Payroll liability accounts hold withholdings and employer taxes between payday and the deposit date. After each tax deposit and filing, the related liability should drop back to the amount accrued since.

• Run your payroll provider's liability report for the reconciliation date.
• Compare it with each payroll liability account balance in QuickBooks.
• A balance that stays after the taxes were paid usually means a tax payment was recorded as an expense instead of being applied to the liability. Recategorize that payment to the liability account.
• A negative liability usually means a payment was recorded twice, or a refund was received and booked to the liability.

If payroll runs inside QuickBooks, make tax payments through the payroll tax screens rather than writing checks, so they clear the liability automatically.

How do you reconcile clearing and suspense accounts?

Clearing accounts should be near zero most of the time. In QuickBooks the common ones are Undeposited Funds, payment processor clearing accounts and Ask My Accountant or uncategorized accounts.

• Undeposited Funds: every customer payment should be grouped into a bank deposit that matches the deposit on your statement. Old items sitting here usually mean a bank feed deposit was added as new income instead of being matched to the payments already received, which doubles the income. Match the deposit to the payments and delete the duplicate.
• Processor clearing: gross sales go in, fees and payouts come out. Compare with the processor's monthly settlement report.
• Uncategorized or suspense accounts: go through each line and move it to the right account. A suspense account is a holding place, not a destination.

What about prepaids, accruals, fixed assets and equity?

These have no outside statement, so you reconcile them to a schedule you maintain:

Intuit notes that you can add a transaction directly in an account register from Chart of accounts > View register, though not every register allows it. For balance sheet corrections a journal entry is the clearer record, since it shows both sides and carries a memo.

A month-end routine for QuickBooks

1. Reconcile each bank and credit card account in the Reconcile tool.
2. Clear Undeposited Funds and any processor clearing account.
3. Tie payroll and sales tax liabilities to their reports.
4. Reconcile loans, by tool or schedule.
5. Update prepaid, accrual and depreciation schedules and post the entries.
6. Run a balance sheet report and check that every line now matches its support.
7. Close the period in QuickBooks so nobody edits a reconciled month without you knowing.

Keep each month's schedules in one workbook, one tab per account, with the QuickBooks balance, the supported balance and the explanation of any difference. The software-neutral version of the same checklist is in how to reconcile a balance sheet, and the full GL procedure is in how to do account reconciliation.

What if a statement is missing transactions in QuickBooks?

A reconciliation often stalls because months of transactions were never entered. If the bank feed did not reach back far enough, download the missing period from online banking as a CSV or a QuickBooks-compatible file and upload it. When the bank provides only PDF statements for older months, QuickBankConvert can turn each one into a CSV on a free account, or a QBO (Web Connect) file on its Plus plan and above; see pricing for the plan details. Then match or add the imported lines before you reconcile. The first-time QuickBooks Online reconciliation guide walks through that catch-up.

Related guides

• Balance sheet reconciliation without software specifics
• Using the QuickBooks Online reconcile screen
• Five stages of a general ledger reconciliation
• QuickBankConvert and QuickBooks