a mandatory part of the bookkeepers job is reconciling with customers this video is for
viewing only there will be no follow along step by step I will describe each step as clearly as
I can but we cannot provide for you an actual customer to get on the phone with and read off
everything one by one so you just have to watch the presentation and understand what the process
is reconciling with customers is the only thing that will prove our entire set of customer records
are correct that's because the customers are an independent source that are keeping records
of the same exact transactions that we are keeping records of if we both agree to what
the transactions and the events are then probably we both recorded them correctly every month we are
required to send the customers a statement the statement is both a summary and a detail the
summary shows the invoices that remain unpaid and the detail is a list of every single transaction
that we had with the customer since the last statement the customers are required to look at
the statement and tell us if they see a difference in the customers and receivables section of our
records the summary report is the open invoice report in the section of customers and receivable
records the detail report is the customer balance detail the customer should check the summary first
this means that they will get a copy of our open invoice report as part of their statement
if the summary is different then you have to come pair the detail report with the customer now the
detailed report looks very much like the customer balance detail so if something's wrong on the
summary the only way to find and fix what actually happened is to get on the phone with the customer
and together check each transaction one by one try to imagine that two customers called you
to complain about what they believed were mistakes on the statement just for this example video let's
assume the customers are correct this will show us the process of how either of us would find and
fix mistakes customer Betty found two differences between the Restatement that we sent her and the
records that she has both of Betty's mistakes will be very easy to find and fix this is what Betty's
open invoice looks like in Betty's computer and again we are assuming that the customer is correct
however this is what our open invoice report looks like for Betty on the same date remember we sent
Betty a copy of our open invoice report as one of the pages of the monthly statement well since the
open invoice report is a summary the only way to find and fix the mistakes is to get on the phone
with the customer and go through the detail one by one until we find the differences and fix them
to show this process clearly i will open to quickbooks files at the same time we will imagine
one of them is our records with holden and we will pretend the other file is on Betty's computer and
Betty's bookkeeper is looking at it to clearly distinguish between the two I made Betty's file
become yellow with the yellow theme and that means all of the title bars in all of the open windows
and Betty's file will be yellow that'll help our eyes clearly see the difference I click down at
my taskbar and you can see I can switch from our file on our computer to Betty's file on Betty's
computer very easily because QuickBooks allows you to open two files at once so Betty's file
has a yellow color theme and we are imagining that we are on the phone with Betty trying to
find and fix the differences since we already compared the summary on open invoice and we know
there is a difference we now have to go through the detail and compare it one by one so in our
computer we open up our customer balance detail and of course we are imagining that on Betty's
computer she opens up whatever detail reports she has that shows a list of every transaction that
we've had with each other since the last statement date and we will go one by one until we find the
difference I notice an hour file invoice number 20 is the last transaction for 1960 dollars when
I compare that to Betty I noticed that she has the exact same thing so invoice number 20 is
not the difference when I look at the next oldest transaction the payment on februari 19 I noticed
that's for nine hundred sixty dollars and when I compare it to our computer I noticed we have
the exact same thing februari 19th a payment of 906 dollars when I look at the third oldest
transaction in our computer I see it's the invoice on a februari 18 and the amount is 4800 however
when Betty looks on her computer for the third oldest transaction invoice number 19 that happened
on februari 18 she has a different number so we can say aha Betty's invoice number 19 is different
from our invoice number 19 you see our invoice number 19 is 4800 so what do we do the only way
to know who's correct is to go back to the hard copy or the printed copy of the actual invoice
that we made when we look at the actual invoice we find out that betty was right therefore we have to
change our records to make them correct in our computer when we double-click invoice number 19
we see that it's actually 16 video hours that were recorded with this invoice however when we switch
over to Betty's computer and we look at invoice number 19 we double-click and open it up and we
can see we will see in a moment that on Betty's computer invoice number 19 was actually 16 editing
hours and as we said a moment ago the hard copy the actual source document the invoice we looked
at actually agrees with Betty so what we have to do is we have to go back to our records and
we have to change it to what it's supposed to be change it to what's actually printed on the
invoice that we sent to Betty when we click Save and close and then click yes for the change we
notice the in our records regarding betty has changed unfortunately even though the balance
has changed because we corrected invoice number 19 the balance still does not match it means there's
another difference somewhere so you have to keep reconciling until you find all the differences
we already looked at the first three or at least the most recent three invoices excuse me the most
recent three transactions so we have to keep going until we find the additional mistake so
we know the first three are okay therefore we go to the fourth one and we see that in our computer
that's a payment on februari 12 for eight hundred dollars and we when we switch to Betty's computer
we see the fourth transaction from the bottom is also a payment of eight hundred dollars then we
noticed the fifth transaction that we check fifth from the newest one fifth from the bottom betty
has invoice number seventeen for six thousand dollars but in our computer the fifth transaction
up or the next one up is a payment on februari seventh of four hundred dollars so we have a
difference in what regarding what is our fifth transaction from the bottom however when we look
back at Betty's computer we see that Betty also has the februari seventh payment of four hundred
dollars so Betty has this payment as the sixth transaction from the bottom but our records has
this payment as the fifth transaction from the bottom that means we are missing what Betty has
here betty has this six thousand dollar invoice number 17 on februari ninth and then above that
has the februari seventh payment of 400 we only have the februari seventh payment of
400 that means we are missing invoice number 17 once again any difference we have we have to go
back to the actual source document and when we do this we find out that invoice number
17 agrees with Betty that it was actually Betty who was listed on invoice number 17
so we have to fix this problem in our records if we don't see invoice number 17 in the section of
Betty then it's possible we put the wrong customer when I scroll all the way up and
look at Alan's information a different customer I noticed that invoice 17 was accidentally recorded
in allen section so i should fix this i'm going to double-click and notice that the invoice is
correct for every other reason except it has the wrong customer when i change the customer
to Betty and I click Save and close I click yes for the change and now that I have fixed both
mistakes I can now see that the ending balance of Betty Boop in our records finally matches
the ending balance of Betty Boop in Betty's records now that we have corrected both of the
mistakes we should reprint the statement and send the statement to her corrected