welcome to the fit small business bank
reconciliation course in this video
we're going to show you how to reconcile
a bank account using Zoho books so
follow along with me login to your Zoho
account now or click the link below this
video for a free trial of Zoho books
let's get started from the Zoho books
dashboard go ahead and click on banking
on the left hand menu and then click the
add bank or credit card button appear at
the top and read there are three ways to
connect your bank account to Zoho books
from the dropdown you can simply select
your bank or type the name of your bank
in this field if you see your bank
listed here in this section with an icon
you can simply click on that button to
select it or your third option is to
enter the account information manually
in the next screen you want to go ahead
and enter your online ID and passcode
once you have done sold you can go ahead
and click the continue button once Zoho
books is connected with your bank
account you will see a list of all of
the accounts that you have at the
financial institution listed in this
section here put a checkmark next to
each account that you'd like to go ahead
and connect to Zoho books download
transaction history from the drop-down
calendar here you want to select the
date that we'd like to go back and
download transactions for please note
that you can go back 90 days in Zoho
books if you need to go back further
than that you will need to import the
bank statements for anything older than
90 days for example let's assume that
it's April 16th and your tax
professional has told you if you bring
in a shoe box next year the fee will be
doubled
so you vow to start using Xero books
immediately in order to get all of your
banking transactions that have occurred
into the whole books since January 1st
you can import your January bank
statement and then use February 1st as
the date you will download transaction
history in the currency field you want
to go
head and select the appropriate currency
for the bank account you are setting up
one of the benefits of using the whole
books is you can easily track both
foreign bank and credit card accounts
once you've made that selection you can
go ahead and click the continue button
once you have successfully set up the
bank feed your bank accounts will be
listed in the banking overview section
as you can see here in the account
details column you will see the name of
your bank account type of bank account
the last four digits of the bank account
number which is not shown here for
security reasons and you will also see a
date here this date represents the date
that the latest transactions were
downloaded from your bank and the
uncatalyzed column you will find the
number of transactions that you need to
review and categorize to the appropriate
income or expense account please note if
you have already entered some of your
banking transactions in SoHo books then
you will also have a column that says
recognized this means that Zoho has
matched a transaction that you entered
manually with one downloaded from your
bank the pending checks column reflects
checks that you have created in SoHo
books but you have not printed the
balance amount in bank column represents
the balance in the bank account as of
the last update and the final column
here amount in Zoho books this is the
current balance in the bank account per
Zoho books these are also basically
another way to say this is transactions
that have been categorized to income and
expense accounts please note that the
goal of the reconciliation process is
for the amount in the bank account this
column to equal the amount in SoHo books
this column let's go ahead and walk
through the steps required to assign an
account to the uncatted Erised
transactions so you want to go ahead and
click on the on categorised
column for the bank account that you'd
like to work with for this account we've
just got one on categorized transaction
but typically you'll probably have pages
of transaction so you want to scroll
down to the very bottom and scroll over
to the oldest transactions and work from
there so go ahead and click on the
transaction and so what happens is a
window opens up here over to the right
which will allow us to complete the
fields of information that we need to
categorize this transaction so the first
field here is category from the
drop-down you want to select the type of
transaction that this represents the
options that you have to choose from are
listed here expense vendor advance
vendor payment transfer to another
account sales return card payment owner
drawings credit note refund and payment
B fund expense account from the
drop-down select the appropriate account
if the account is not set up you can set
it up by clicking this plus new account
button here at the very bottom the
vendor field is optional from the
drop-down you can select the appropriate
vendor if the vendor is not set up you
can click the plus new vendor button and
set the vendor up in this screen as you
can see here the amount field has
already been populated and there's no
ability to edit that information so
that's the amount that downloaded
directly from the bank the reference
field is optional in this field you can
enter any additional information about
this transaction such as a purchase
order number the description field will
automatically populate with the
description from the bank
you can change the description or delete
it altogether attach receipt the whole
books allows you to attach receipts
directly to the transactions they are
associated with so you have the option
of
attaching a receipt from your desktop
from the cloud or attach it from other
documents customer if the transaction is
related to a customer you can select the
customer from the drop-down if the
customer has not been set up you can
click the plus new customer option here
and set the customer up directly in this
screen once you have categorized the
transactions that have been downloaded
you can go ahead and save your work here
and once you have categorized all the
transactions that were downloaded you'll
no longer see transactions an
uncatalyzed column that message has gone
away and you will also notice that the
amount in bank matches the amount in
SoHo books column i've mentioned
previously you can reconcile as often as
you like since any new transactions will
download daily when you receive your
bank statement at the end of the month
it will be a breeze to reconcile if you
have already categorized your making
transactions throughout the month let's
walk through the steps you should take
to complete the monthly bank
reconciliation from the banking overview
screen you want to go ahead and click on
the account that you would like to
reconcile from this screen in the upper
right hand corner you want to click on
this gear icon and select reconciliation
history and as you can see from this
screen we have not reconciled this
account yet if we had previously
reconciled this account we would have
information here listing the
reconciliation information as you can
see so we'll go ahead and click
reconcile account in this screen you
want to go ahead and enter information
directly from your bank statement so
here we're going to enter the beginning
and ending statement periods in each of
these fields please note if you are
reconciling more than one month then be
sure to use the beginning date of the
FIR
month and the ending date of the last
month so in this example we are
reconciling three months worth of
transactions so we've gotten a little
bit behind so we're going to reconcile
the month of April the month of May in
the month of June because we're
reconciling those three months the
beginning statement date will represent
April first the first day of the first
month will reconciling and then the
ending date will represent the last day
of the last month we're reconciling in
this example it would be June so you
want to enter that information in this
field and then you want to enter the
ending balance from the bank statement
that's listed in this field here okay so
that goes in the closing balance field
once you have completed all of those
fields you can go ahead and click the
start reconciliation button in the next
screen you will see a list of all
transactions that were downloaded and
categorized in SoHo books so the date
column here in this screen represents
the date of the transaction transaction
details this is the account that you
categorized the transactions to the type
column represents the type of account
that you selected for transaction
details along with the name of the
vendor if you chose a vendor for the
transaction the deposits column
represents all of the deposits that were
made to the account and the withdrawals
column represents all of the withdrawals
that were made to the account the clear
column represents items that were
downloaded from the bank which means
that they have essentially cleared the
bank if you do not have a check mark in
this column next to a transaction then
more than likely it was probably
manually entered and you need to make
sure to put a check mark there so that
you can balance if we scroll down to the
very bottom we've got a closing balance
here as of June 30th of 2013 thirty-five
cents here
so this is the ending balance that you
entered earlier from your bank statement
be cleared amount here two thousand
thirty eight thirty five is the total
amount of all transactions that were
downloaded to Zoho books from your bank
or manually enter it so it's basically
the total of everything up above that
has a check mark the difference columns
represents the difference between the
closing balance and the cleared amount
our goal is to get to a difference of
zero as we have here please note if you
do not have a zero balance here I want
you to refer to our tips for reconciling
big accounts later on in this section we
have a link here that says add
transaction if you discover that you
have transactions that are missing then
you can go ahead and click add
transaction and this will take you to
the Zoho books where you can actually
add those missing transactions and then
you can return here to complete your
reconciliation and again as we discussed
previously you can attach a copy of your
bank statement clear cheques receipts or
other supporting documents here for
future reference at the very bottom of
the screen you will see three buttons
save and reconcile later reconcile and
cancel the save and reconcile later
button is going to become your friend if
for some reason you are working through
a reconciliation and you're out of
balance and can't figure it out
or you get interrupted and you've got to
move on to something else you can save
and reconcile later which means that it
will save your work so that you can come
back and pick up where you left off
reconcile you only want to click this
button if your difference here is zero
if your balance is not zero be sure to
refer to the tips that I've shared with
you on reconciling
accounts please note that the whole
books will not allow you to proceed with
a reconciliation until your balance is
zero and for the cancel button click
this button if you don't want to save
your work and your plan is to start over
from scratch since we are in balance
we're going to go ahead and reconcile
this account once you do that you will
see that we are back at the
reconciliation history screen now and so
this is a reconciliation that we just
completed and the status is reconciled
so please note that if you decided to
save and reconcile later the status will
show in progress until you complete the
reconciliation please also note that if
you accidentally click the reconcile
button and you didn't mean to you can
undo a reconciliation by hovering in the
row here and then you will see a picture
of a trashcan if you hover over that it
says undo reconciliation now let's talk
about some tips for reconciling bank
accounts if you're having trouble
getting to a zero difference between
wasn'ta Holbrook's versus what your bank
statement has try some of these
troubleshooting tips tip number one make
sure that each transaction that's listed
has a checkmark in the far right column
marked clear so we talked about that
previously if a transaction does not
have a check mark it is not included in
the cleared amount total tip number two
the difference could be one transaction
so look for the exact dollar amount that
you are off for example if your
difference is 42 dollars then look at
your bank statement to see if there is
one transaction for this amount if not
check the transactions recorded in SoHo
books tip number three make sure that
every transaction on your bank statement
has been recorded in SoHo books any
transactions that are listed on your
bank
but do not appear in Soho books will
cause you to be out of balance and vice
versa you will need to add the
transaction to the whole books and then
proceed with the reconciliation tip
number four unless you don't have a lot
of transactions I would not recommend
reconciling more than one month at a
time the more transactions you have to
reconcile the higher the chances are
that you will have a difference locating
an out of balance will be that much
harder to find if you have to look
through two or three months worth of
transactions as opposed to just one
month and finally tip number five if you
have a difference greater than a dollar
and you have not been successful with
figuring things out I suggest that you
start the reconciliation over you can do
this at any time by clicking that cancel
button as we discussed previously by now
you should have a better understanding
of how reconciling your bank accounts
can help you to stay on top of the cash
coming in and going out of your business
and make tax time a breeze
remember to keep the following tips in
mind to make this process as smooth as
possible
first you should organize and store
receipts in the cloud using a receipt
scanner app click the link below to
access our guide on best receipt scanner
app second invest in an accounting
software like their whole books so that
you can connect your bank accounts and
automatically download and categorize
transactions as often as you like third
compare receipts to the bank statements
to ensure only transactions that you
have authorised are being deducted from
your bank accounts that wraps up our
video tutorial on how to reconcile a
bank account using Zoho books