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Account Reconciliation – Discrepancies

Company owners sometimes ask me:  “Should balance adjustments arising from account reconciliation problems cause me any concern?”

Reconciliation Discrepancies in Your Quickbooks FileIn my experience and opinion, accounts should reconcile – right down to the penny – almost all of the time!

The account reconciliation process is just a large matching game between what you have on your books, and what the bank statement shows.

  • First, you click off all matching (cleared) checks and deposits.
  • Then you record transactions shown by the bank not yet on your books and check them off as matching.
  • Finally, you review the non-matching (outstanding) items on your books, such as checks and deposits not yet cleared by the bank.
  • When the cleared balance on your books equals the bank ending balance (i.e., the difference is $0.00), you’re reconciled!

Quick Tip

Once or twice a year, if you have a large number of transactions clearing the account, and you’re “off” by a small amount (e.g., between $.01 to $5 total), in the interest of using your time effectively, it’s acceptable to post an entry to an account such as Miscellaneous Office Expense for that small unreconciled difference.

If, however, you find that your accounting assistant regularly has small, unresolved differences, be vigilant and let him or her know that you are reviewing the account reconciliations closely.  Of course, follow-up immediately if you see any large, unresolved differences!

 

Regards – Diane Gilson

Copyright: Diane C.O. Gilson, Info Plus ( + ) Accounting®