welcome to the fit small business
quickbooks online training course in
this lesson we're going to cover how to
reconcile business credit card accounts
in QuickBooks Online to follow along
with me
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similar to your personal credit card
accounts it is important that you
reconcile your business credit card
accounts on a monthly basis reconciling
is the process of matching the
transactions on your credit card
statement to what you have recorded in
QuickBooks reconciling your credit card
accounts regularly will help to ensure
any discrepancies between your records
and the credit card companies are
resolved in a timely manner for example
a credit card charge that comes through
for a different amount from what you
authorized it will also ensure timely
notification of any fraudulent
transactions for example if you notice
transactions listed on your credit card
statement that you did not authorize you
can notify the bank as soon as possible
so that they can investigate some of the
benefits of reconciling your business
credit cards and QuickBooks Online are
all transactions on the credit card
statement get recorded in QuickBooks all
of the reconcile transactions are marked
in QuickBooks as cleared this means your
transactions are matched up with what's
on your credit card statement your
financial statements such as your profit
and loss statement and balance sheet are
up to date you are able to run credit
card reconciliation reports that will
provide both a summary and detail of all
credit card charges and credits before
you follow the steps to reconcile be
sure that you have your credit card
statement handy for the credit card that
you want to reconcile we will refer to
the credit card statement often during
this process from the home page go ahead
and click on the gear icon and go down
to reconcile below the tools column
we will complete these fields using the
credit card statement for our fictitious
company Paul's Plumbing from the screen
you want to click the drop down and
select the credit card account that you
want to reconcile and then you can go
ahead and click the reconcile Now button
once you've done that all right here's
where our credit card statement comes in
handy so the first field that we need to
complete is the statement ending date
your credit card statement will have a
beginning date and an ending date so you
want to enter the ending date in this
field here the beginning balance your
credit card statement will have a
beginning balance and you want to enter
that balance in this field if the credit
card was previously reconciled as in
this case then this field will display
the ending balance of last month which
is the beginning balance of the current
month and should match up the beginning
balance that's on your current credit
card statement ending balance enter the
ending balance that appears on your
credit card statement this is the amount
that you want to reconcile to meaning
that you will need to get to this
balance at the end after all
transactions have been matched finance
charges if your credit card company
charges you finance charges you want to
go ahead and enter that information in
the finance charge field here and then
the date of the finance charges should
be the same date as your statement
ending date you also want to categorize
these charges into an account on your
chart of accounts if you have not set up
an account to categorize your finance
charges be sure to watch our video
tutorial on how to set up the chart of
accounts click here to watch that video
once you've completed all of the fields
on this screen you want to go ahead and
click ok on the next screen we've got
charges and cash advances listed on the
left here and then on the right side
we've got payments and credits listed
before we begin to match up transactions
double check that
the information we entered from the
credit-card statement is correct this
information appears at the very bottom
of the screen if you need to edit any of
this information you simply want to just
click on the Edit information from
statement link the other thing you want
to make sure that you do is we want to
go ahead and make sure the check mark
next to high transactions after the
statement in date box is checked hiding
these transactions means that you won't
see transactions that took place after
the statement ending date that you are
reconciling so for example our statement
ending date is October 31st 2016 so by
checking this box we will not see any
transactions dated November 1st or after
this makes reconciling much simpler
let's go ahead and start with the
charges and cash advances section refer
to your credit card statement and for
each charge or cash advance that appears
on your credit card statement you want
to go ahead and put a check mark next to
it in QuickBooks here QuickBooks will
put a check mark next to that item you
also want to make sure that you mark off
each item on your statement with a check
mark as you market in QuickBooks once
every item on your credit card statement
has been marked off check to see if the
charges and cash advances total in
QuickBooks matches the total charge and
cash advance on your credit card
statement here so notice our total for
this is four hundred twenty four dollars
this should match up with your credit
card statement for charges and cash
advances your credit card statement may
separate the credit card charges from
cash advances if it does in order for
you to match up with the QuickBooks
total you will have to add these two
items up to get one total amount similar
to what we just did for charges and cash
advances we want to go ahead and do the
same thing for each payment and credit
that appears on your credit card
statement check it off in the reconcile
screen by clicking on it as we've done
here and then you want to go ahead and
check it off on your paper statement as
well once every item on your credit card
statement has been marked off check to
see if the payments and credits total in
quick
books matches the total on your credit
card statement so we want to make sure
for our statement that we've got a
hundred and five dollars for payments
and credits on our credit card statement
our ultimate goal is to have a
difference of zero if your difference is
not zero then you want to try some of
the troubleshooting steps let's go ahead
and talk about eight troubleshooting
tips for reconciling credit card
accounts and QuickBooks Online tip
number one if possible narrow the search
down to the transaction type figure out
if you are out of balance with the
charges and cash advances or payments
and credits so just as we talked about a
few minutes ago you want to make sure
that you're matching up the total that's
in QuickBooks matches with your credit
card statement and you want to determine
if the out of balance is with charges
and cash advances or with payments and
credits now if you happen to be out of
balance for both charges cash advances
and payments and credits and tackle them
separately so in other words balance
your charges and cash advances first and
then move on to the payments and credits
or vice-versa tip number three look for
the exact dollar amount that you are off
by so for example if your difference
here is $50 then look for a transaction
for this amount on your credit card
statement and then also look on both the
cheques and payment section and the
payments and credit side of the
reconcile window tip number four triple
check the information that you entered
from the credit card statement I cannot
stress this enough at making sure that
this information has been entered
correctly is key if you transpose the
number when you entered it that's going
to cause your other balance as well so
you want to go ahead and click that link
and verify that this information is
correct once you have done that go ahead
and close out tip number five check to
see if there are any transactions in the
reconcile window that you did not put a
checkmark next to
if the transaction is on your credit
card statement then it should have a
checkmark next to it in the quickbooks
reconcile window here tip number six if
you do have a transaction on the credit
card statement that is not in quickbooks
then you will need to add it to
quickbooks to do so you want to go ahead
and click the finish later button here
by clicking the finish later button
QuickBooks will save the work that you
have done so far and you will easily be
able to come back and pick up where you
left off if the missing transaction is
in the charges or cash advances then go
ahead and enter it as you normally would
and our how to manually enter business
credit card transactions lesson we walk
you through step-by-step on how to enter
credit card transactions in QuickBooks
if the missing transaction is in the
payments or credit section the enter it
as you normally would and on how to
enter credit card returns lesson we walk
you through step by step how to enter
credit in QuickBooks click here now to
watch that video tip number seven take a
break if you've been at it for a while
and you need a break click in the finish
later button as we talked about a second
ago we'll save the work that you have
done and you can easily pick up where
you left off when you're ready sometimes
taking a breather and coming back and
help you spot what's causing the
difference tip number eight and it's a
key one while it might be tempting I
recommend that you don't click that
reconcile button until you have a
difference of zero I promise you that
the problem will not go away the
difference will just carry over to the
next month until you figure it out if
you do hit the finish Now button and you
have a difference QuickBooks will record
the out of balance amount in a
miscellaneous expense account called
unreconciled discrepancies of course if
we're talking a small amount five
dollars or less for example then it
might be worth your while to move on at
the end of the day you get to determine
what amount you are comfortable with
since we do have a difference of zero we
can go ahead and click on finish now
button
and behind-the-scenes QuickBooks will
mark all of these items as cleared
QuickBooks will also generate our bank
reconciliation reports from this screen
we've got a few options we could write a
check for our credit card amount we can
enter a bill or we could leave the
balance in the reconcile account so
we'll choose to leave the balance in the
reconcile account this will pay our
credit card later that brings us to this
screen here and so from this screen we
can go ahead and click on our
reconciliation report that was generated
similar to what we discussed in how to
reconcile your bank accounts lesson you
should create a folder to keep all
credit card reconciliation reports in I
recommend one folder per credit card so
let's take a look at our reconciliation
report we've got a summary section and a
detailed section and then most important
we've got the statement ending balance
that's our credit card balance and we've
got the register balance notice that
they are in agreement they match up so
that was really the whole goal of
reconciling this is to make sure that
our QuickBooks matches our credit card
statement so we have achieved that goal
credit card reconciliation reports are
one of the top five reports that
auditors will request and my experience
as an auditor if you are unable to
produce these reports that audit will
not go well for you another thing that
QuickBooks does behind the scenes when
you reconcile transactions is it also
marks these transactions in the register
as reconciled so we'll go ahead and
navigate back to the credit card
register and take a look at that now to
navigate back to the register you want
to click on the gear icon located to the
left of your company name and then we'll
go ahead and select chart of accounts
and then we'll go ahead and scroll down
to our credit card and to view the
register just click on the view register
link to the far right
notice that the transactions that we
have reconciled have the letter R in
this column so this means that they have
cleared the bank and they match our
credit card statement typically once a
credit card transaction is reconciled
you do not want to make any changes to
it this is primarily due to the fact
that you have balanced it with your
credit card statement you can edit the
account if you need to so for example if
you categorize something as meals and
entertainment and it should have been
office supplies definitely go ahead and
make that change but you do not want to
make any changes to the date or the
amount if you do it can cause your
financial statements to be inaccurate
and you will no longer be in balance
with your credit card company that wraps
up the lesson on how to reconcile
business credit card accounts in
QuickBooks Online to access our full
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