How to Reconcile in QuickBooks Desktop, Step by Step

Quick Answer: In QuickBooks Desktop, open Banking > Reconcile, pick the account, set the Statement Date, confirm the Beginning Balance against your paper or PDF statement, type the Ending Balance, add any service charge or interest earned that is not already recorded, and select Continue. Tick every transaction that appears on the statement until the Difference reads $0.00, then select Reconcile Now.

Reconciling a bank account in QuickBooks Desktop means proving that the checking or savings register agrees with the bank's own statement for one period. You work in two windows: Begin Reconciliation, where you enter the statement figures, and Reconcile, where you tick off cleared items. Desktop also gives you discrepancy reports and an undo option that QuickBooks Online handles differently.

This walkthrough follows Intuit's help article Reconcile an account in QuickBooks Desktop and adds the practical detail a bookkeeper needs when the numbers refuse to cooperate. If you use the cloud product instead, the screens are different; see how to reconcile in QuickBooks Online.

Before you open the Reconcile window

Intuit recommends backing up the company file first. A reconciliation changes the cleared status of many transactions at once, and a backup lets you roll back cleanly if you click the wrong thing. Then gather:

• The bank statement for the period, showing the beginning balance, ending balance and statement date.
• Every transaction for that period already entered in QuickBooks: checks, bill payments, deposits, transfers, card swipes.
• The last reconciliation report, so you can confirm where the previous month left off.
• If this is the very first reconciliation for the account, the opening balance you used when you set the account up.

Entering transactions before you reconcile is the step people skip. If a month of debit card purchases never made it into the register, the reconciliation will show a large difference that no amount of ticking can fix. When the bank only gives you a PDF, one way to load that missing month is to convert the statement into a QBO Web Connect file and import it; the QuickBooks integration page explains how that file is used, and the general import guide covers the import itself.

How do you start a reconciliation in QuickBooks Desktop?

The Begin Reconciliation window is where you tell QuickBooks what the bank says. Work through it in this order:

1. From the Banking menu, select Reconcile.
2. In the Account field, choose the checking, savings or credit card account you are reconciling.
3. Check the Statement Date. QuickBooks suggests one based on the last reconciliation; change it to the closing date printed on your statement.
4. Compare the Beginning Balance with the opening balance on the statement. QuickBooks fills this in from previously cleared transactions, so you cannot type over it. If it does not agree, stop here and read the beginning-balance section below.
5. Type the Ending Balance from the statement.
6. Enter any Service Charge and Interest Earned that appear on the statement but are not yet in the register, with a date and an account for each.
7. Select Continue.

Step 6 is a shortcut. The bank's monthly fee and the interest it paid are the two items you usually learn about only from the statement, so QuickBooks lets you record them here instead of making you leave and write a separate check or deposit. Pick a bank service charges expense account for the fee and an interest income account for the interest. If you already entered them in the register, leave these fields blank or you will record them twice.

Ticking transactions in the Reconcile window

The Reconcile window splits the register into two columns. For a bank account they are checks and payments on one side and deposits and other credits on the other. For a credit card, Intuit's article names them Charges and Cash Advances and Payments and Credits.

Go down the statement one line at a time. Find the matching entry in QuickBooks, confirm the amount and date, and place a checkmark next to it. The figures at the bottom update as you go: the Cleared Balance moves toward the statement's Ending Balance and the Difference shrinks toward zero.

A few settings make this faster:

• Hide transactions after the statement's end date removes anything dated later, so next month's deposits do not distract you.
• Matched automatically selects transactions that were downloaded through online banking and already matched. Use it as a starting point, then still compare each one against the statement.
• Clicking a column header sorts by that column. Sorting by amount is the quickest way to find a specific figure when the statement is long.
• The "items you've marked cleared" totals show how many deposits and payments you have ticked. Compare the count with the statement's own summary of deposits and withdrawals.

What stays unticked matters as much as what you tick. Checks you wrote that the payee has not cashed, and deposits made on the last day of the month that the bank posted the next day, should remain uncleared. They are legitimate timing differences and will clear on next month's statement.

What do Reconcile Now, Leave and Enter Adjustment do?

When the Difference is $0.00, select Reconcile Now and the period is closed. When it is not zero, you get choices, and each one has a consequence.

Intuit's guidance is to force the adjustment only if you are confident in your data. An adjustment does not find the problem; it buries it. If a $46.20 check was entered as $64.20, the adjustment makes the reconciliation balance while the vendor's ledger and your expense report both stay wrong.

Why is my beginning balance wrong?

The Beginning Balance is the sum of everything already marked cleared. If it disagrees with the statement's opening figure, something that was cleared in an earlier month has since been changed, deleted, or un-ticked. Common culprits are an edited check amount, a deleted deposit, or a transaction whose date was moved into an earlier reconciled period.

Desktop has three tools for this:

• Locate Discrepancies in the Begin Reconciliation window opens the reports Intuit provides for tracking down discrepancies, such as transactions from a reconciled period that were later edited or deleted. Look there for an amount that changed after you closed the month.
• The Previous Reconciliation report, found by going to Reports, then Reports Center, and searching for it, shows what you cleared last time. Choose Detail, Summary or Both, and select whether to include changes made since. Compare its ending balance with what the bank says.
• Undo Last Reconciliation reverts the account to the prior beginning balance and unclears the transactions from the most recent reconciliation, so you can redo that month. It works one month at a time, from the latest backward.

Work these in order: read the discrepancy report first, fix or restore the changed transaction, and only use undo if a whole month was reconciled incorrectly. Undoing is not destructive to the transactions themselves, but you will need to re-tick that month.

Where Desktop differs from QuickBooks Online

The ideas are the same in both products, but the details trip people up when they switch:

• Desktop puts service charges and interest into the Begin Reconciliation window. QuickBooks Online asks you to record them as transactions.
• Desktop's undo is Undo Last Reconciliation, available to the file's users. In QuickBooks Online, undoing an entire reconciliation is limited to accountant users; see how to undo a reconciliation in QuickBooks Online.
• Desktop's history lives in the Previous Reconciliation report in the Reports Center rather than in a reconciliation history page.
• Customer payments in Desktop often sit in Undeposited Funds until you record a deposit, which is the most common reason Desktop deposits fail to match. That problem has its own guide: reconciling Undeposited Funds in QuickBooks Desktop.

A worked example

Suppose the March statement for an operating account shows a beginning balance of $8,412.06, an ending balance of $7,935.71, a $15.00 monthly fee and $2.37 interest. You enter 03/31 as the Statement Date, confirm $8,412.06 matches, type $7,935.71 as the Ending Balance, put $15.00 in Service Charge and $2.37 in Interest Earned, and continue.

After ticking every item on the statement, the Difference shows $112.50. Sorting the payments column by amount, you find no $112.50 entry, but you do see check 2219 for $225.00 entered twice, once from the check register and once from a bill payment. One of them never cleared because it does not exist. Deleting the duplicate brings the Difference to $0.00, and you reconcile. Half-amount or double-amount differences like this are worth checking before anything else.

Keeping next month easier

Reconcile monthly, as soon as the statement arrives, and do not edit or delete reconciled transactions without checking the discrepancy report afterward. Store each month's PDF next to its printed reconciliation report. If you are catching up on a backlog and the bank's downloads only go back a few months, a converter that reads statement PDFs can produce QBO files from older statements; QuickBankConvert does this on its Plus plan and asks for the password when a statement PDF is protected. Check the plan limits on pricing before you start a long catch-up.

Related guides

• How to reconcile in QuickBooks Online
• Bank statement reconciliation, software-agnostic
• Reconciling Undeposited Funds in QuickBooks Desktop
• Converting bank statements to QBO format