What To Do When Opening Balance Doesn’t Match the Bank Statement
Aug 9, 2021 11:00:00 AMKathy DiseQuickBooks, Financial Management
Have no fear! When the opening balance does not match the bank statement, there are two common reasons:
There are previously reconciled transactions which were deleted OR
A transaction which was previously reconciled was unreconciled
In order to track down what is going on here, the following strategies may be helpful in uncovering the discrepancy(ies).
Easiest Fix
Start your bank reconciliation.
Note the amount of the difference in the beginning balance in QuickBooks to your bank statement.
Enter the correct ending balance
Complete the bank reconciliation making sure that the total deposits and total withdrawals match the amounts on the bank statement.
The difference should be the amount of the difference in the beginning balance.
Is/are there any transactions from prior periods that can be checked to make the difference zero?
Look at those transactions to make sure they were transactions that you adjusted or corrected since the last bank reconciliation.
Check these transactions. If your difference is zero, you are done.
View the Changed Transactions Report
To see what transactions have changed since the last reconciliation, use the Reconciliation Discrepancy Report.
Go to Report
Banking
Reconciliation Discrepancy
If you're able to locate the transaction(s) using the changed transactions report, while in the report, select the transaction(s) to edit them. View the register to correct the status (R, C or Blank) and re-start the reconcile.
If a previously reconciled transaction was deleted, re-enter it to its original state. If not, make these changes then check your opening balance and restart your reconcile.
Check for Deleted and Changed Transactions since the last Bank Reconciliation
Go to Report
Accountant
Audit Trail
At the top left – Customize
Choose the filter button. Filter the following
Date – Modify date to date of last bank reconciliation to today
Account – Choose the bank account you are reconciling
The resulting list is a list of changes made since the last bank.Scan the list for a deleted or changed transaction. Correct the transaction and finish reconciling.
Check for Duplicate Transactions
ONLINE
In the bank account register, click the grey Customize button (upper left corner) > Show: Not Reconciled or Cleared > Ok. This will show any transactions which may have been entered erroneously or as duplicates. To clear these up, simply click on the transaction > Edit > make the adjustment to the account or click More > Delete if the transaction is a duplicate. Confirm the change.
In the bank account register, click the Sort by button at the bottom left. Use the drop down button to sort by Cleared Status. This will show any transactions which may have been entered erroneously or as duplicates at the end of the register. These transactions will not have a notation in the column to the left of Deposits. To clear these up, simply right click on the transition, Delete if the transaction is a duplicate.
Check the Opening Balance Equity
To make sure that the beginning balance is accurate. If the OBE is inaccurate, click on the transaction > Edit > make the balance adjustment > confirm the change.
Check for Errors from Bringing in Transactions from Banking Sync
ONLINE
Go to the QuickBooks section of the Banking Transactions tab to make sure that there were not any erroneous transfers taking place while Adding/Matching. If there are, click on the Transfer and make the necessary adjustments.
Verify Uncleared Transactions
Expenses or Income --but which were recorded within the system--should be verified. Sometimes a transaction, which was marked Paid in the system, can be stalled with the bank. In this situation, either contact the bank about the matter or wait for the transaction to post.
If you still need help, give BudgetEase a call. Having an incorrect opening balances is one of our most common situations that we come across.
Kathy has over 30 years experience helping small businesses succeed. As a commercial lender, commercialization expert and now as a QuickBooks diamond level advisor, Kathy understands the challenges small business owners face. Her experience helps business owners quickly accomplish their financial goals. As the owner of BudgetEase, Kathy works with clients to develop a plan to efficiently process 1,000s of small transactions so owners can make informed decisions. She lives in Shaker Heights, OH with her husband Ralph and enjoys golf, curling and walking in Cleveland’s fabulous Metro Parks.
Complete the bank reconciliation making sure that the total deposits and total withdrawals match the amounts on the bank statement. The difference should be the amount of the difference in the beginning balance. Is/are there any transactions from prior periods that can be checked to make the difference zero?
If the opening balance is an amount other than zero, change the opening balance for an account in use. If you think you've voided, deleted, or changed the amount of a previously cleared transaction,correct the edited transactions. To help you find the edited transactions: Run a Reconcile Discrepancy report.
Some of the reasons for a difference between the balance on the bank statement and the balance on the books include: Outstanding checks. Deposits in transit. Bank service charges and check printing charges.
Check for one of three errors: The item was recorded incorrectly in your checkbook register,The item was paid or was credited to your account for the wrong amount, or. Your check numbers were listed incorrectly.
So, what's the difference? Your statement balance typically shows what you owe on your credit card at the end of your last billing cycle. Your current balance, however, will typically reflect the total amount that you owe at any given moment.
Answer 1: “Plug” the balance sheet (i.e. enter hardcodes across one row of the Balance Sheet for each year that doesn't balance). Answer 2: Wire the balance sheet so that it always balances by making Retained Earnings equal to Total Assets less Total Liabilities less all other equity accounts.
If your reconciliation doesn't balance, adjust the records to account for any missing data. For example, note uncleared checks and adjust the balance until the check clears.
This can be achieved by first identifying the discrepancies through thorough reconciliation of the bank statement with the transactions in QuickBooks. Once identified, incorrect transactions can be rectified by ensuring proper categorization and accurate recording.
When your bank account balance is less than your QuickBooks balance: If there are expenses which have cleared the bank but haven't been entered into QuickBooks, the balances will differ. These could be handwritten checks that have cleared the bank, but not yet been entered into your check register.
At the end of your bank reconciliation statement process, the accounting record's balance (after making adjustments) should equal the bank statement balance. If there are further discrepancies, investigate what might have been missed in your recording or errors that may have been made at the bank.
Start with the first transaction on your statement. Find the same transaction in the Reconciliation window in QuickBooks. Compare the two transactions. If they match, put a checkmark next to the amount in QuickBooks.
Step 1: Always, firstly, revise the total on both sides of the debit and credit of the Trial Balance. Step 2: If after rechecking, the balances do not match, then the amount of difference is determined and checked if any transaction of the same amount is left unposted in any book of accounts.
Answer and Explanation: The correct answer is c. re-add the trial balance and calculate the difference. To check if the trial balance is equal, you should recalculate the total debits and total credits first.
For example, if the bank statement is for financial activity from January 5 to February 4, the beginning balance is how much was in your account on January 5. Ending balance. This is the amount in an account on the last day of your statement balance.
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