How to Reconcile Credit Cards in QuickBooks in 5 Quick Steps

Therefore, good accounting is not only a crucial factor for a growing business but it’s also a legal requirement that any business should know and follow carefully. Feel free to let me know if you need further assistance with reconciling your credit card transactions. However, if you see existing transactions recorded in QuickBooks manually that are identical to the downloaded ones, link them together to avoid getting duplicates.

• Also, after adding, remember to mark the transaction as cleared by clicking the radial button in the column on the right.
• This level of convenience will allow you to match and categorize a large number of transactions at a mere click of a button.
• When all the transactions in QuickBooks match the transactions on your statement, the Difference (C) between the ending balance and the cleared balance should be zero.
• However, if you see existing transactions recorded in QuickBooks manually that are identical to the downloaded ones, link them together to avoid getting duplicates.
• We will walk you through the process of how to reconcile credit cards in QuickBooks in greater detail.

Finally, when the reconciliation is completed, click the green button “Finish” right upper the corner of the screen to wrap things up. Below is an example of reconciliation with all the transactions matched to the statement. To match transactions between QuickBooks and your statement, you have to trace transactions from QuickBooks to your statement as well as investigate unmarked ones. Typically, the financial process occurs monthly, quarterly, or yearly for larger closing exercises.

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In the prior step of tracing transactions, you placed a mark next to every transaction on your statement that appears in QuickBooks. Now, it’s time to look for any transactions on your statement that do not contain a mark next to them. Also, after adding, remember to mark the transaction as cleared by clicking the radial button in the column on the right. I can provide detailed insights about connecting and reconciling a credit card account in our system. One common task that your finance teams have to handle every month even if they don’t like it is reconciling credit cards.

• Finally, when the reconciliation is completed, click the green button “Finish” right upper the corner of the screen to wrap things up.
• The CC charges are listed in the bank transactions however they do not appear in the reconciliation when I start the reconciliation.
• Before you start the reconciliation process, you need to make sure that they have a record of all your transactions from the beginning up to the end of your bank statement.
• To match transactions between QuickBooks and your statement, you have to trace transactions from QuickBooks to your statement as well as investigate unmarked ones.

Your bank usually sends your bank statement at the end of every month, week, and even at the end of each day. This frequency will depend on the type of business that you run and the number of transactions that you do. The basic way to reconcile your credit card in QuickBooks is to enter the ending statement balance to match your transactions to the transactions on the statement in your account.

What is Credit Card Reconciliation and How to Reconcile Credit Cards in QuickBooks Successfully?

However; if for some reason, they’re still not equal, you will have to repeat the entire bank reconciliation process until both are accurate. Any potential error in the cash account can result in an inaccurate amount being entered or an amount being omitted from the records. The correction of the error will then increase or decrease the cash account in your company’s books.

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This is even more essential during an audit because, at that time, the tax office or a third-party auditor will need proof of every payment that took place. Without that proof, your company may fail an audit and miss out on potential investment, even face legal problems, and those are things that all businesses never want them to happen. Every successful company needs a clean book to survive and thrive in the long term.

To put it simply, accountants will compare the credit card statements of the company against the general ledger. And if all payments in the ledger match with those on the statement then the ledger could be considered accurate. If parts of the ledger do not match what’s on the credit card statement, there will be discrepancies and the financial controller needs to find out what are its causes. Before you start the accounting effects reconciliation process, you need to make sure that they have a record of all your transactions from the beginning up to the end of your bank statement. Businesses that are using online banking services can download the bank statements for the regular reconciliation process instead of having to enter the information manually. Fees will be deducted from your bank statement to cover the bank’s processing services.

All you need to do is to review, categorize, and approve them from the For Review section. As mentioned earlier, deposits in transit are money received and recorded by the business but are not yet recorded by the bank. To make the balance, you will need to add deposits in transit to your bank statement. To achieve a balance between your company and your bank’s account statement, you will need to do bank reconciliation by preparing a reconciliation statement. In today’s accounting trends that feature steep demands, many companies use specialized accounting software for bank reconciliation to reduce the amount of work needed.

Step #3: Make Adjustments to the Cash Account

As mentioned earlier, a non-sufficient funds (NSF) check is a type of check that has yet to be honored by the bank due to insufficient funds in the entity’s bank accounts. The check amount hasn’t been deposited into your bank account; therefore, it needs to be deducted from your cash account records to balance your statements. We will use the short credit card statement below to illustrate the process of how to reconcile credit cards in QuickBooks in general. Make sure you compare the cash account’s general ledger to the bank statement to spot potential errors. That’s why the business needs to identify the reason for the discrepancy and reconcile the differences. This is done to confirm that every item is accounted for and the ending balances will match accurately.

How to Clear Out Outstanding Checks in Quickbooks

By entering your ending statement balance and matching the transactions between QuickBooks and your transaction statement, your credit card accounts will be reconciled. The next step you need to do is adjusting the cash balance in the business account. You can do so by adding the interest or deducting the overdraft fees and monthly charges. Before you can do this, you need to take into account the bank charges, NSF checks, and accounting errors.

Choose the Account and Input Your Statement Information

If your bank account earns interest from its current balance, it must also be added to the cash account. To reconcile your bank statement, the account balance as reported by the company’s bank is compared to the general ledger of a business. Businesses will then maintain a cash book that shoes the cash available while the bank column reflects the cash at the bank. By understanding what bank reconciliation is, you’ll be more mindful of its importance the next time you reconcile your bank statement. Make sure you follow each step in this quick guide to help you manage your bank reconciliation duties without running into problems and errors on your document.