A reconciliation mismatch in QuickBooks is when the numbers you want to match with a bank or credit card statement are not in agreement. Sometimes the variance is simply due to a data-entry error. In more complex instances, a transaction that had already been reconciled was either edited, deleted, voided or altered to change the opening balance of a later reconciliation.
The key point here is that- Do not automatically make an adjustment to neutralize the difference. Reconciliation adjustment that rugs the underlying issue let hide and adds headaches for accounting after. Intuit in fact suggests to look into the transactions and reconciliation history before relying on an adjustment.
This guide takes a diagnostic approach, allowing you to identify what changed, where the discrepancy originated and select the right strategy on how to fix reconciliation discrepancy in QuickBooks Desktop or Online.
Table of Contents
Quick Answer
When QuickBooks reconciliation is not matching with your bank statement, then work on finding out the exact difference and the reconciliation period of its first appearance.
Then:
- Ensure the statement date and ending balance.
- Make sure the beginning balance matches with the previous reconciliation.
- Find out the edited, deleted, voided, duplicated, or entered incorrectly transactions.
- Verify the missing transactions.
- Reconciliation Discrepancy report checking where available.
- Compare the current account register with the previous reconciliation report.
- Start investigation on reconciliation adjustment or journal entry.
- Rectify the underlying transaction rather than forcing the account to balance.
- Once again Reconcile and ensure that the difference reaches $0.00.
Intuit offers a Reconciliation Discrepancy report, Audit Trail, and Previous Reconciliation reports to investigate the issues for QuickBooks Desktop. Whereas QuickBooks Online provides a Reconciliation Discrepancy Report and Audit Log for beginning-balance issues.
Find Your Situation
Before changing anything, determine which of these situations most closely describes your problem.
What You See | Most likely Area to Investigate |
Beginning balance is wrong | Previous reconciliation or opening balance |
Ending balance is wrong | Statement information or account entries |
Difference equals one transition | Missing, duplicate or incorrect transaction |
Difference appears after reconciliation | Edited, deleted, voided, or unreconciled transaction |
Difference is caused by an old journal entry | Reconciliation adjustment |
Bank statement has a transaction missing in QuickBooks | Missing Transaction |
QuickBooks has a transaction the bank does not show | Timing, duplicate, or incorrectly entered transaction |
First reconciliation is incorrect | Opening balance |
Problem appeared after converting QuickBooks Version | Opening/reconciliation history may need review |
The correct fix depends up on where the discrepancy originated to influence the classification matters.
If you think of changing today’s transaction and assume finding resolution for beginning-balance issue, then you are wrong. Because the transaction was deleted prior to few months.
What Is Causing the Problem?
- Incorrect Beginning Balance
The opening balance is typically from the previous reconciliation. If the ending balance is different than what arrived at by the ending balance in the previous statement, then something changed in the reconciled history.
Intuit indicates that edited, deleted, voided, moved or unreconciled transactions are common causes for a reconciled beginning balance to change in QuickBooks Online.
- Incorrect Ending Balance
A surprisingly simple cause is entering the wrong ending balance from the bank statement.
Before investigating transactions, compare:
- Statement ending date
- Statement ending balance
- QuickBooks ending balance
- Account being reconciled
Offer a precise checklist for checking against the bank statement when reconciling accounts in QuickBooks, which specifically says to verify the ending date and ending balance entered into each reconciliation screen.
- Edited or Deleted Reconciled Transactions
For instance, a $2,000 payment was settled in March. Somebody in a later post ranks it $1,800.
That difference of $200 will be historical which you need to reconcile.
Similarly, removing a transaction that had previously been reconciled can affect the balance even when its original reconciliation looks correct.
- Missing Transactions
The bank may show a transaction that was never recorded in QuickBooks.
Examples include:
- Bank fees
- Interest
- Checks
- Electronic payments
- Deposits
- Transfers
- Payments on credit-cards
In order for reconciliation to be conducted properly, the transaction can only be entered if it is entered in the books and valid.
- Duplicate Transactions
A transaction may have been entered manually and then downloaded through a connected bank feed as a second transaction.
That may make the balance in your QuickBooks seem different from what is on your bank statement even though that amount looks familiar.
- Reconciliation Adjustments
A prior user may have entered an adjustment simply to force QuickBooks to reconcile.
This is one of the areas that deserves special attention.
Intuit warns that reconciliation adjustments should not be used to fix underlying errors without appropriate accounting guidance because correcting the original error later can create another discrepancy.
Diagnostic Check
Follow this sequence rather than manage editing transactions randomly.
Step 1: Record the Exact Difference
Whenever you are seeing a vague statement like “QuickBooks is off”, must avoid working on them.
Record the exact amount.
For Instance:
Bank statement difference: $325.00
Then look for changes that could mathematically explain that amount.
A $325 discrepancy may be:
- One $325 transaction
- A $300 transaction plus a $25 fee
- Several smaller changes
- A beginning-balance change
- A combination of edited transactions
Step 2: Check the Statement Information
Start verification on actual bank or credit-card statement.
Confirm:
- Correct account
- Correct statement ending date
- Beginning balance
- Ending balance
- Deposits
- Withdrawals
- Fees
- Interest
- Transfers
During reconciliation, QuickBooks Desktop uses the statement end balance and date, while its beginning balance is from the prior reconciliation.
Step 3: Verify the Prior Reconciliation
The Previous Reconciliation report in QuickBooks Desktop allows users to compare what cleared back when the previous reconciliation was made with how those transactions exist at present.
According to Intuit, the report can display transactions that have cleared in reconciliation and, depending on your report option, any changes made to those transactions after reconciliation.
This is particularly useful when the problem appeared after a previously successful reconciliation.
Step 4: Look for Changed Transactions
Run for QuickBooks Desktop:
Reports → Banking → Reconciliation Discrepancy
Select the relevant account and review the transactions that changed after the last reconciliation.
Look particularly for:
- Changed amounts
- Changed dates
- Deleted transactions
- Voided transactions
- Transactions that became unreconciled
Step 5: Verify the Audit History
The Reconciliation Discrepancy Report in QuickBooks Online will indicate what was changed and who modified it. If the report on discrepancies does not account for all of a gap, Intuit also advises reviewing the Audit Log for deleted or voided transactions.
The goal is not to assume that every change is an error.
A transaction may have been changed intentionally. First determine ‘why’ it changed.
Choose the Correct Fix
Once you identify the cause, choose the smallest correction that restores the accounting records.
- If the ending balance was entered incorrectly
Correct the reconciliation information so it matches the bank statement.
Do not alter legitimate transactions simply to compensate for an incorrect statement balance.
- If a transaction was entered incorrectly
First you need to open the transaction and correct all the relevant information, such as amount, date, account etc.
Determine whether the correction affects a closed accounting period or previously issued financial statements before changing a reconciled transaction.
- If a transaction was deleted
Determine whether the transaction should still exist.
If it belongs in the books, recreate it using the original supporting documentation.
- If a duplicate exists
Compare both transactions with the bank statement.
If one is a duplicate, remove or correct the duplicate according to your bookkeeping procedures.
- If a transaction is missing
Enter the legitimate transaction using the information from the bank statement or supporting documentation.
For instance, if the bank charged a service fee that was never recorded, the books may need an appropriate expense transaction.
- If the beginning balance is wrong
This requires more care.
As per Intuit recommendation in QuickBooks Online, opening the Reconciliation Discrepancy Report and reviewing each change affecting the beginning balance.
When it is your first reconciliation, the problem may instead be an incorrect opening balance. Intuit’s guidance says the opening balance represents the account balance on the date you began tracking the account in QuickBooks.
- If a reconciliation adjustment exists
Do not automatically delete it.
First determine:
- Why was it created?
- Which reconciliation did it relate to?
- Was the original discrepancy ever corrected?
- Would removing it change a previously reported balance?
If the adjustment was inappropriate, the proper correction may require accounting review.
Version/Service Differences
Each QuickBooks Desktop and QuickBooks Online follow a different workflow, and therefore the name of menus and troubleshooting tools are not identical but remain unchanged.
QuickBooks Desktop
Useful tools include:
- Report on Reconciliation Discrepancy
- Previous Reconciliation report
- Audit Trail
- Missing Checks report
- Account register
- Reconciliation Discrepancies account
Intuit says its current Desktop guidance is to use reconciliation discrepancy information and previous reconciliation reports, to find changed transactions.
This can be undone if needed, likewise the previous reconciliation is able to be undone via QuickBooks Desktop. Before making changes, Intuit recommends that you back up the company file.
QuickBooks Online
QuickBooks Online uses:
- Reconcile
- Report on Reconciliation Discrepancy
- Audit Log
- Account register
- Reports on Reconciliation
For instance, a beginning balance discrepancy for an account that was already reconciled directs users to the Reconciliation Discrepancy Report and transaction history with Intuit’s current workflow.
QuickBooks Online Again automatically generates a reconciliation report (as an attachment) after the solution which is helpful while troubleshooting an issue down the line.
Practical Illustrative Examples
Example 1: A $250 Transaction Was Modifie
It was the end of June when a company reconciled its checking account.
On July 29, an employee modifies a reconciled payment from $1,250 to $1,000.
Yor next reconciliation is therefore down $250.
Diagnostic path:
Take a prior reconciliation → modify transaction → review original documentation → correct amount if change was in error —> reconcile again.
Example 2: The First Reconciliation Is not right
A company begins using QuickBooks in January.
The owner enters an opening balance that does not agree with the bank’s actual balance on the chosen start date.
The first reconciliation never reaches zero.
Here, investigating months of transactions may waste time.
The first question should be:
Was the opening balance correct when this account was established?
A common issue due to incorrect opening balance is a first-reconciliation problem, which Intuit highlights as one of the five factors that can lead you there.
Example 3: A Reconciliation Adjustment Is Hiding the Problem
User sees a difference of $600 and makes an entry for an adjustment of $600.
The reconciliation now finishes.
Many months later, a second error of the derivation with original $600 which had been wrong is found and fixed.
This adjustment may create a new imbalance now.
It was proving quite the challenge. It is easily deducible that a simple adjustment can cause the screen to balance without having necessary moved either of these books closer to accuracy.
Mistakes to Avoid
- Don’t repeatedly enter adjustments
If you are entering adjustments every month, take a step back and investigate the root source of those records.
Avoid Deleting Transactions because of Discrepancy Report
- Do not change historical transactions indiscriminately
An editing of reconciled transaction from older periods can have impact on financial statement reporting of the previous periods.
- Don’t change historical transactions blindly
Changing an old reconciled transaction can affect previous financial reporting.
- Don’t ignore the beginning balance
Current-period transactions may be incorrect if the beginning balance is wrong.
When tracing, do not reconcile multiple months in one time
Start from the oldest unstated To reconcile for multiple months at a time, Intuit suggests reconciling month-over-month starting with the oldest statement.
- Do not assume that every bank-feed item is correct
However, downloaded transactions still have to be reviewed, matched, classified and checked for duplicates.
How to Verify the Fix
After making a correction, do not stop simply because QuickBooks allows you to finish reconciliation.
Perform a second-level check.
Verification checklist
- [ ] Correct bank or credit-card account selected
- [ ] Statement date is correct
- [ ] Beginning balance is correct
- [ ] Ending balance matches the statement
- [ ] Deposits have been reviewed
- [ ] Payments and withdrawals have been reviewed
- [ ] Duplicate transactions have been checked
- [ ] Missing transactions have been investigated
- [ ] Changed reconciled transactions have been reviewed
- [ ] Reconciliation adjustment has been investigated
- [ ] Difference reaches $0.00
- [ ] Reconciliation report has been saved
For QuickBooks Online, Intuit says you should see $0.00 net discrepancy and the beginning balance is equal to the bank statement after all significant changes are resolved.
Store reconciliation reports periodically with QuickBooks Desktop; maintaining a historical backup will help you to refer to it if similar reconciliation issues arise later. Intuit recommends saving or exporting reconciliation reports for this purpose.
Prevention Checklist
The safest and easiest reconciliation discrepancy is to fix that one, which you are never created.
Use this monthly checklist:
- Before reconciliation
- Obtain the complete bank statement.
- Confirm the account.
- Confirm the statement date.
- Enter or verify the correct ending balance.
- Make sure transactions for the period are recorded.
During reconciliation
- Match transactions individually.
- Investigate unusual differences.
- Avoid unexplained adjustments.
- Watch for duplicates.
After reconciliation
- Save the reconciliation report.
- Review unusual adjustments.
- Restrict unnecessary access to reconciled transactions.
- Keep supporting bank statements.
- Investigate discrepancies accurately
According to QuickBooks Online recommendations, transactions for the reconciliation period have been ensured of addition and categorized before reconciling.
When Do You Need Professional Help?
A simple mismatched transaction can usually be tracked down quickly. But professional bookkeeping or accounting support is needed when the issue covers multiple past reconciliations, journal entries dating back a long time ago, deleted transactions, conversions between different versions of QuickBooks or statements that have already been reported to external parties.
If you have done reconciliation adjustments in the past, cannot find out where the beginning-balance difference comes from, or if you are not sure whether changing a historical transaction will affect your books at all, Quick Bookkeeping Expert help review your reconciliation trail and pinpoint the proper bookkeeping correction. You want to correct the underlying records — not just push the reconciliation to zero.
Final Decision Guide
Use this quick diagnostic map:
- Difference appears on the first reconciliation?
→ Check the opening balance.
- Beginning balance changed after previous reconciliations?
→ Review the Reconciliation Discrepancy Report, previous reconciliation, and audit history.
- One transaction explains the difference?
→ Verify the transaction against the bank statement and supporting documentation.
- Bank has an item missing from QuickBooks?
→ Determine whether it needs to be recorded.
- QuickBooks contains an item that the bank does not show?
→ Determine whether it is outstanding, duplicated, incorrectly entered, or otherwise legitimate.
- A previous reconciliation adjustment exists?
→ Investigate it before creating another adjustment.
- Several old reconciliations are affected?
→ Stop making random changes and consider professional accounting review.
The key diagnostic principle is: Identify the transaction or balance modification that created the discrepancy before deciding how to correct it.
FAQs
What is a reconcile discrepancy in QuickBooks?
A reconcile discrepancy occurs when QuickBooks’ records do not agree with the corresponding bank or credit-card statement during reconciliation. The difference can originate from balances, missing or duplicate transactions, or changes to previously reconciled transactions.
Why does QuickBooks show a reconciliation discrepancy?
Common reasons include an incorrect beginning or ending balance, edited or deleted reconciled transactions, missing or duplicate transactions, and reconciliation adjustments.
How do I find reconciliation discrepancies in QuickBooks Desktop?
In QuickBooks Desktop, go to Reports → Banking → Reconciliation Discrepancy, select the account, and review transactions that changed after the previous reconciliation. You can also use Previous Reconciliation and Audit Trail reports for deeper investigation. If you are confused with the process, then seek professional help through QuickBooks desktop support phone number 24 7.
How do I fix reconciliation discrepancies in QuickBooks Online?
Start by checking the beginning balance and opening the Reconciliation Discrepancy Report. Review each reported change and use the Audit Log to investigate deleted or voided transactions that may not appear in the discrepancy report.
Do I use a reconciliation adjustment to fix the difference?
Not automatically. An adjustment may make the reconciliation balance, but it does not necessarily correct the original accounting error. Intuit advises investigating the underlying cause before relying on reconciliation adjustments.
What if my QuickBooks reconciliation is off by a few cents?
Treat even a small difference as something to investigate. Check the ending balance, transaction amounts, rounding, duplicates, and changes to previously reconciled transactions. Avoid creating an unexplained adjustment merely because the difference is small.
Does deleting a reconciled transaction cause a reconciliation problem?
Yes. Deleting, voiding, or modifying a transaction that was included in an earlier reconciliation can change the balance carried into a later reconciliation. QuickBooks Online specifically identifies these changes as common causes of beginning-balance discrepancies.
Can I undo a reconciliation in QuickBooks Desktop?
QuickBooks Desktop provides an ‘Undo Last Reconciliation ’option. Because undoing a reconciliation changes the reconciliation status of transactions, create a backup and understand which period you are reversing before proceeding.
Why is my beginning balance different from my previous reconciliation?
A reconciled transaction which is done previously, may have been changed, edited, deleted, voided, moved, or unreconciled. An incorrect opening balance or reconciliation history issue can also be responsible.
How often should I reconcile QuickBooks?
For many businesses, monthly reconciliation is a practical routine because it allows the books to be compared with each bank or credit-card statement. Intuit recommends reconciling checking, savings, and credit-card accounts monthly.
Wrap Up
QuickBooks reconciliation doesn’t keep up with the all the data and you find yourself a few days later looking at it after finding that the quickest way to have closure in QuickBooks reconciliation is not to force some things to equal zero.
Instead, work backward.
Start with the exact discrepancy. Verify the statement information. Check the beginning balance. Review previous reconciliation records. Discover Edited, Deleted, Voided, Missing or Duplicate Transactions Then fix the transaction or amount that truly led to the issue.
As for QuickBooks Desktop, the Reconciliation Discrepancy, Previous Reconciliation and Audit Trail tools may help trace changes made in history. In QuickBooks Online, the Reconciliation Discrepancy Report and Audit Log give you a formal method of dealing with beginning-balance issues.
Reconcile again after addressing the root cause of the discrepancy, ensuring that the difference is equal to $0.00.
Source: quickbooks.intuit.com
