11 Things to Do If Your Non-Online Account Doesn’t Balance in QuickBooks 2016 - dummies

11 Things to Do If Your Non-Online Account Doesn’t Balance in QuickBooks 2016

By Stephen L. Nelson

Here are some suggestions for reconciling an account when you’re having problems in QuickBooks. If you’re sitting in front of your computer, wringing your hands, try the tips in this section:

  • Make sure that you’re working with the right account. Sounds dumb, doesn’t it? If you have several bank accounts, however, ending up in the wrong account is darn easy. So go ahead and confirm, for example, that you’re trying to reconcile your checking account at Mammoth International Bank by using the Mammoth International Bank checking account statement.

  • Look for transactions that the bank has recorded but you haven’t. Go through the bank statement to make sure that you recorded every transaction that your bank has recorded. You can easily overlook cash-machine withdrawals, special fees, or service charges (such as charges for checks or your safe deposit box), automatic withdrawals, direct deposits, and so on.

    If the difference is positive — that is, the bank thinks that you have less money than you think that you should have — you may be missing a withdrawal transaction. If the difference is negative, you may be missing a deposit transaction.

  • Look for reversed transactions. Here’s a tricky one: If you accidentally enter a transaction backward — a deposit as a withdrawal or a withdrawal as a deposit — your account doesn’t balance. And the error can be difficult to find. The Reconcile window shows all the correct transactions, but a transaction amount appears in the wrong list. (The amount appears in the Deposits and Other Credits list when it belongs in the Checks and Payments list, or vice versa.) The check that you wrote to Acme Housewreckers for the demolition of your carport appears in the Deposits and Other Credits list, for example.

  • Look for a transaction that’s equal to half the difference. One handy way to find the transaction that you entered backward — if you have only one — is to look for a transaction that’s equal to half the irreconcilable difference. If the difference is $200, for example, you may have entered a $100 deposit as a withdrawal or a $100 withdrawal as a deposit.

  • Look for a transaction that’s equal to the difference. Here’s an obvious point: If the difference between the bank’s records and yours equals one of the transactions listed in your register, you may have incorrectly marked the transaction as cleared or incorrectly left the transaction unmarked (shown as uncleared). Maybe that was too obvious. Naaaah.

  • Check for transposed numbers. Transposed numbers are flip-flopped digits. For example, you enter $45.89 as $48.59. These turkeys always cause headaches for accountants and bookkeepers. If you look at the numbers, detecting an error is often difficult because the digits are the same. For example, when you compare a check amount of $45.89 in your register with a check for $48.59 shown on your bank statement, both check amounts show the same digits: 4, 5, 8, and 9. They just show them in a different order.

    Transposed numbers are tough to find, but here’s a trick that you can try: Divide the difference shown in the Reconcile window by 9. If the result is an even number of dollars or cents, chances are good that you have a transposed number somewhere.

  • Use the Locate Discrepancies button. The dialog box shown below includes a Locate Discrepancies button, which you can click to display another dialog box that prints reports that may help you reconcile your account. In particular, the dialog box lets you view a report of changes made to previously cleared transactions (which would be pretty suspicious bookkeeping activity and would definitely foul up your reconciliation).

    It also shows a report that lists transactions marked as cleared during previous reconciliations, which might be interesting because maybe you erroneously marked a transaction as cleared before it really was cleared.

    The Begin Reconciliation dialog box.
    The Begin Reconciliation dialog box.
  • Have someone else look over your work. This idea may seem pretty obvious, but you would be amazed by how often a second pair of eyes can find something that you overlooked. Ask one of your co-workers or employees (preferably that one person who always seems to have way too much free time) to look over everything for you.

  • Be on the lookout for multiple errors. If you find an error by using this laundry list and you still have a difference, start checking at the top of the list again. You may discover, for example, after you find a transposed number that you entered another transaction backward, or incorrectly cleared or uncleared a transaction.

  • Try again next month (and maybe the month after that). If the difference isn’t huge in relation to the size of your bank account, you may want to wait until next month and attempt to reconcile your account again.

    Consider the following example: In January, you reconcile your account, and the difference is $24.02. Then you reconcile the account in February, and the difference is $24.02. You reconcile the account in March, and — surprise, surprise — the difference is still $24.02. What’s going on here?

    Well, your starting account balance was probably off by $24.02. (The more months you try to reconcile your account and find that you’re always mysteriously $24.02 off, the more likely that this type of error is to blame.) After the second or third month, having QuickBooks enter an adjusting transaction of $24.02 is pretty reasonable so that your account balances.

    If you successfully reconciled your account with QuickBooks before, your work may not be at fault. The mistake may be (drum roll, please) the bank’s! And in this case, you should do something else… .

  • Get in your car, drive to the bank, and beg for help. As an alternative to the preceding idea — which supposes that the bank’s statement is correct and that your records are incorrect — try this idea: Ask the bank to help you reconcile the account. Hint that you think the mistake is probably the bank’s, but in a very nice, cordial way. Smile a lot.

    And one other thing: Be sure to ask about whatever product the bank is currently advertising in the lobby (which encourages the staff to think that you’re interested in that 180-month certificate of deposit, causing them to be extra-nice to you).

    In general, the bank’s record-keeping is usually pretty darn good. Nevertheless, your bank quite possibly has made a mistake, so ask for help. Be sure to ask for an explanation of any transactions that you discover only by seeing them on your bank statement. By the way, you’ll probably pay for this help.