How to reconcile in QuickBooks Online: a bookkeeper's walkthrough

Most reconciliation trouble in QuickBooks Online comes from one misunderstanding: clearing the bank feed is not reconciling. They are two different screens doing two different jobs, and a file can have an empty feed and still be months unreconciled. This guide takes both stages in order, then covers the three problems that take the most time (a difference that will not clear, a beginning balance that is off, and a reconciliation that has to be undone). Menu paths and labels follow QuickBooks’ current US help pages, listed in the Sources section; older layouts and other regions label some of them differently.

Two stages, two screens

Stage 1 can be done daily. Stage 2 is done once per statement, normally monthly, for every bank and credit card account.

Stage 1: clear the bank feed

When a bank or card is connected, downloaded transactions wait on the Bank transactions page and do not affect the books until you match or categorise them ^[1] . QuickBooks’ current help calls the waiting tab Pending; older screens and some help pages still call it For review ^{[1] [2]} .

For each transaction there are two choices ^[1] :

• Match it, if a record already exists in QuickBooks. Matching links the bank line to that record. QuickBooks can match to invoices and bills, paychecks and tax payments, checks and receipts, bank transfers, and credit card payments and refunds. If the suggested match is wrong, search for another.
• Categorize it, if no record exists. This creates a new transaction with the category you choose. Use Split to divide one bank line across several categories ^[2] .

Matching is what prevents duplicates ^[1] . If a bill was entered and paid in QuickBooks and you then categorise the bank line as a new expense, the cost is in the books twice and the bill payment will sit uncleared at reconciliation. When a line looks like a supplier payment or a customer receipt, look for the match first.

Bank rules

Rules categorise recurring lines for you. Go to All apps, Accounting, Rules, and select New rule ^[3] . The limits worth knowing:

• A rule can have up to 5 conditions, testing Description, Bank text, or Amount.
• QuickBooks applies only one rule per transaction, in the order the rules are listed, and you change priority by dragging.
• With auto-post turned on, QuickBooks posts any transaction the rule applies to immediately, without review.
• A company can hold up to 2,000 rules ^[3] .

Keep auto-post for lines that never vary, such as bank fees. For anything that might have a bill behind it, let the rule suggest and a person confirm.

Stage 2: reconcile the account

Before you start

Have the statement open. QuickBooks’ own checklist is that every transaction for the statement period has been added and categorised, and that the opening balance matches the statement ^[4] . If Stage 1 is not finished for the period, finish it first.

The steps

1. Go to All apps, then Accounting, then Reconcile. Select Reconcile, or Get started if this is the first time ^[4] .
2. Choose the account from the Account dropdown.
3. Check the Last statement ending date. It should be the day before this statement starts.
4. Enter the Ending balance and Ending date from the statement.
5. Select Start reconciling.
6. Tick each transaction that appears on the statement. The Cleared balance changes as you go.
7. When the Difference is $0.00, select Finish now, then Done ^[4] .

If you mistyped the statement figures, select Edit info to correct the ending balance or date without starting again ^[4] .

QuickBooks also offers AI-powered reconciliation on its Plus, Advanced, and Enterprise Suite plans: you upload the statement, QuickBooks fills in the ending balance and date and proposes the matches, and you review what it flagged ^[5] . Verification of an uploaded statement can take up to an hour ^[4] . The review is still yours to do.

What is left unticked

Transactions in QuickBooks that are not on the statement stay unticked. Each one should be a real item that had not reached the bank by the ending date: a cheque not yet presented, a payment sent on the last day. Read the list every month. An unticked item from three months ago is not timing. It is usually a duplicate or a payment that never happened.

The report

When you finish, QuickBooks saves a reconciliation report. Reopen any of them from History by account on the Reconcile page ^[4] . Save the report with the statement as the working paper for the account; see workpapers and audit trail.

When the difference will not clear

QuickBooks names three causes: the ending balance was entered wrongly, transactions were entered that have not cleared the bank, or transactions are missing or duplicated ^[6] . Work through them in this order, cheapest check first:

1. Re-read the ending balance and ending date against the statement.
2. Compare totals before lines. If the statement shows total money in and total money out, compare each with the ticked deposits and payments. Whichever side is off is the side to search.
3. Look for the difference as an amount. A difference of 45.00 is often a single 45.00 transaction that is missing or ticked in error.
4. Halve the difference. If half of it is a transaction amount, that transaction was probably entered the wrong way round.
5. Find what is on the statement but not in QuickBooks and enter it.
6. Find what is ticked but not on the statement and untick it.
7. Check amounts that are slightly off, such as transposed digits ^[6] .

QuickBooks will let you finish and accept the difference, and it posts an adjusting entry for the amount when you do. Its own guidance is that it is best to resolve the difference and to speak to an accountant first ^[6] . Treat a forced reconciliation as a query you have chosen to stop investigating, and write down why.

When the beginning balance is off

If someone changes a reconciled transaction after the fact, the next reconciliation opens with a beginning balance that does not match the previous ending balance. QuickBooks lists four causes ^[7] :

• An incorrect opening balance entered when the account was created.
• A reconciled transaction that was edited, deleted, voided, moved, or unreconciled.
• A categorised bank feed transaction that was undone and sent back to pending.
• A transaction dated before the last reconciliation’s ending date that was reconciled manually.

The Reconcile page shows an alert saying the account is not ready and how much the beginning balance is off by, with a link, We can help you fix it, that opens a discrepancy report listing the changes ^[7] . From there:

• Use the audit log in Settings, filtered to the account and the period since the last reconciliation, to find deletions and voids.
• Filter the account register by reconcile status to find transactions marked R that are dated after the last completed reconciliation ^[7] .

Restore what was changed and the beginning balance corrects itself. This is the strongest argument for locking the books after each close: go to Settings, Account and settings, the Advanced tab, and turn on Close the books with a closing date and a password ^[8] .

Undoing a reconciliation

One transaction. Go to All apps, Accounting, Chart of accounts, find the account, and select View register. Open the transaction and click its status box to cycle from R (reconciled) to C (cleared) to blank, then save ^[9] .

A whole reconciliation. QuickBooks’ instructions are to sign in as the Primary Admin, go to Reconcile, select History by account, and choose Undo from the dropdown in the Action column ^[9] . Its beginning-balance guidance also refers to accountant users undoing reconciliations from the same screen ^[7] .

QuickBooks’ warning is worth repeating in full: undoing a reconciliation is irreversible and permanently deletes the associated reports and attachments, so download anything you need first ^[9] . Undo the most recent month first and work backwards. Do not jump to an earlier month.

A routine that holds across clients

Clear the feed weekly on busy files so queries reach the client while the transaction is fresh. Reconcile every bank and card account to its statement at month end, read the unticked items, save the report, and then lock the period. The whole sequence is in the month-end close process. For Xero clients, where the feed and the reconciliation are a single screen, see bank reconciliation in Xero.

Where ExpenseFlow fits

ExpenseFlow does not reconcile accounts, read bank feeds, or match bank transactions. Its part comes before Stage 1. Clients send bills and receipts by upload, by forwarding to a per-client email address, or from Google Drive. Each document is read line by line, coded with a category and tax treatment, and held in a review queue until a person approves it. Approved items sync to QuickBooks Online as bills or expenses.

By the time the payment downloads from the bank, the bill or expense is already in QuickBooks, so the bank line has a record to match. Fewer lines get categorised from the feed with nothing behind them, and fewer duplicates reach Stage 2.