Before You Start

This guide assumes you have basic reconciliation history in QuickBooks Online and administrator access to your account.

Overview

20 min
Setup Time
Intermediate
Difficulty
As Needed
Maintenance

What You’ll Learn

  • How to identify the source of balance discrepancies
  • Steps to verify your reconciliation beginning balance
  • Finding deleted or un-cleared transactions that affect balances
  • Utilizing the Audit Log to trace historical changes

1. Understanding the Discrepancy

When you start a bank reconciliation in QuickBooks Online, you’ll see two key balances:

Key Balances

  • QuickBooks Balance: This is the running balance of the selected account as per your QuickBooks records.
  • Bank Balance: This represents the last balance QuickBooks pulled from your bank feed.

Why They Differ

  • Pending transactions not yet processed by the bank.
  • Downloaded transactions not yet matched or added in QuickBooks.
  • Manual entries or deletions in QuickBooks not reflected in the bank.

2. Initial Checks

Start by ruling out the most common causes of discrepancies.

Method A: Verify Beginning Balance

Your beginning balance is crucial. If it’s off, all subsequent reconciliations will be too.

What to Check:
  • Previous reconciliation report’s ending balance.
  • Bank statement for the prior period’s ending balance.
  • Manual adjustments made to the opening balance.
Common Mistakes:
  • Incorrectly entering the initial opening balance.
  • Un-reconciling a transaction from a prior period.
  • Deleting a reconciled transaction.

Method B: Reviewing Bank Feed and Un-cleared Transactions

Ensure all bank feed transactions have been processed and look for un-cleared items.

Expert Tip: Always complete your bank feed categorization before starting a reconciliation. Unmatched or un-added transactions are a frequent cause of balance mismatches.

3. Step-by-Step: Diagnosing the Balance

Here is a structured workflow to pinpoint the issue.

Here is a sample query to illustrate looking for specific transactions.

SELECT
  TransactionDate,
  Description,
  Amount,
  ReconciliationStatus
FROM
  QuickBooks.Transactions
WHERE
  AccountID = 'Bank_Account_ID' AND TransactionDate BETWEEN '2024-01-01' AND '2024-01-31'
ORDER BY
  TransactionDate DESC;

4. Using the Audit Log

  1. 1

    Access the Audit Log

    Go to Gear Icon > Audit Log. Filter by the bank account in question and the date range of the discrepancy.

  2. 2

    Look for Deleted or Edited Transactions

    Specifically search for “Deleted” or “Edited” actions related to the bank account around the time the discrepancy began.

  3. 3

    Review Reconciliation Changes

    Identify any changes to reconciliation statuses (e.g., a reconciled transaction becoming un-reconciled).

Common Error: User Permissions

Ensure the user troubleshooting has full administrative access to view the Audit Log and make necessary corrections. Limited permissions can hide critical information.

5. Fixing the Discrepancy

Resolution Checklist

  • Adjust the beginning balance if it was incorrect
  • Re-enter any deleted reconciled transactions
  • Match or add all pending bank feed transactions
  • Run a Reconciliation Discrepancy report in QBO

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