QuickBooks Bank Account Has Never Been Reconciled! Bulk Reconcile is the Answer

January 21, 2010

Help! How Can I Reconcile Years of Transactions Without Doing a Month-To-Month Reconciliation Since the Beginning of the Company File?

I frequently get this question. This morning a follower sent an email saying that the bank accounts in her QuickBooks file had not been reconciled since the file was created in 2002. She wanted to know if there is a way to do a bulk reconciliation or if she would have to start from the beginning and reconcile years of transactions since the beginning.

The answer is DO ONE LARGE BULK RECONCILE.

I prefer to do a BULK Reconciliation to the last or next to the last month of the year before my current year. In this example, 2009 is still technically an open year because we have not prepared our Income Taxes and it is wise to reconcile the January bank statement before closing the year....just to be sure you have not failed to record any December activity that may have cleared in January.

Here's how I answered her email using her example of 2002 - current:

Select a reconciliation date - let's use 11.30.08 and record the ending balance from the statement

Verify that all dates on the entry page of the reconciliation agree: Reconciliation Date; Bank Service Charge Date and Interest Earned Date....THIS IS VERY IMPORTANT! DOUBLE CHECK THIS BEFORE YOU GO ANY FARTHER!

Place a check mark in the box inside the reconciliation window where you see the list of checks and deposits that allows you to show only the items as of the date of the currently selected bank statement (11.30.08)

Make sure that your check & deposit columns are sorted by date

Select "Mark All"

Using the November 2008 bank statement, "uncheck" any items that are not on that statement....if they are not there, they didn't clear in November.

Next, using the DECEMBER 2008 statement, double check that you did not "clear" anything that should have remained open until the following month.

If you are sure that you have checked carefully and your bank reconciliation remains out of balance, make a journal entry to OTHER EXPENSE to balance the statement.

(I use this method because the out of balance is the result of missing transactions that would eventually become Retained Earnings if they had been properly entered and cleared; and because I would like to post any historic adjustments to an Other account type so that a) I can easily locate and research it later and b) I can feel confident that the tax professional who will be preparing tax returns or reviewing company books will review any postings to Other Expense and make correcting entries for the adjustments I've made.

Reconcile December 2008 using the same method. This should give you a pretty accurate year-end bank reconciliation.

Reconcile 2009 month by month to assure that you have accurate bank reconciliations for the most recent year and to "reset" your file and assure an accurate, sequential reconciliation process going forward.

Thanks Imelda for a Great Question
and a Great Topic for our Blog!

I hope this is useful information.

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