How to Reconcile Business Credit Card Accounts in QuickBooks Online

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 login to your QuickBooks Online account
now, or click the link below for a free 30-day trial of QuickBooks Online.
You can also click this link to access our full QuickBooks Online course and other
helpful resources. Let’s get started. 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. Preparing business credit card reconciliations on a regular basis,
will help to ensure any discrepancies between your records and the credit card
company’s are resolved in a timely manner, and that timely notification of
any fraudulent transactions take place. So 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.
In addition, reconciling your credit card transactions in QuickBooks helps ensure every transaction is noted in your books. This helps keep your financial statements like profit and loss and
balance sheet up to date. Click the links below to learn more about the profit and
loss and balance sheet reports. Before we go into the reconciliation steps, 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.
Now let’s go ahead and walk through the steps to reconcile your business credit
card account in QuickBooks Online. From the home page go ahead and click on the
gear icon located in the upper right hand corner. And below the tools column
the third option is reconcile. So go ahead and click on that. The first thing you want to do is select
the account that you would actually like to reconcile. So from the drop-down we
want to go ahead and select the credit card account that we want to go ahead
and reconcile. One of the things that you might see is a notification that your
beginning balance of your account is off. So what this means basically is since
the last time you reconciled this account there was an amount that had
previously been reconciled that was changed, and that could either be the
dollar amount was changed or the date was changed. So what’s nice is you can
actually click this link here that says ‘we can help you fix it’ and go ahead and
follow the steps to fix that out of balance before you start reconciling the
current month. From your credit card statement you want to go ahead and enter
the ending balance that appears on that statement, and also your ending statement
date in this field here. Once you’ve done that you can click the start reconciling
button at the bottom. Now here is the new and improved reconciliation tool that
Intuit released about a couple of months ago now. Alright so let’s talk about
some of the information that you will see on this screen. The statement ending
balance here: this is the amount that we entered in the previous screen from the
credit card statement. Be sure to double check this amount because it will cause
you to be out of balance if it is incorrect. Your beginning balance here as
we discussed earlier is basically your ending balance from last month’s credit
card statement. This will automatically be populated by QuickBooks for you.
The cleared balance is going to change as you start to reconcile items. So as you
select your items in this screen that you want to reconcile, this dollar amount
will continue to change. The charges dollar amount will increase
as you select credit card charges from the transaction section down below. And
your payments as well will also change as you select payments from the
transaction section below. The difference here is automatically calculated by
QuickBooks, and it’s the difference between your statement balance and the
cleared balance. Our goal is to get to a difference of 0. Down in the
transaction section it is separated by charges, payments, and all transactions.
So as you can see you can easily filter between the type of transactions that
you want to take a look at, or you can look at all of them at one time. If you
are new to reconciling, I recommend that you reconcile the area with the least
number of transactions first. Our goal is to make sure that every charge and
payment listed on the credit card statement is marked as cleared in this
reconciliation window. To mark an item cleared you want to simply click on the
radio button to the right of that item in this final column. Let’s start with
our payments first. We’ve just got three payments here, you can select them
individually or you can go ahead and just click the radio button at the top
to mark them all as cleared if they appear on your credit card statement.
And it’ll just confirm that you want to select all when you do that so we’ll say
yes. So once you’ve selected your total payments you want to verify that the
total payments that you’ve cleared here in this window matches what total
payments add up to on your credit card statement. So in this example our credit card statement
has payments totaling $1,240, and the items that we have marked as cleared in
this reconciliation window also total $1,240. So in this situation our
payments do match and we can move on to charges. However if your payments do not
match, stay with me because I’m going to share some troubleshooting tips in a few
minutes on how to fix the out of balance. So we’ll go ahead and repeat the same
steps for charges. And so with charges you’ll probably go one by one and select
items here. So we’ll go ahead and just assume all of our items are on our
statement and confirm that yes to select all. And then again you want to make sure
that the total amount of charges that you have marked as cleared in
QuickBooks, this $1,869.15 is in fact what appears on your
statement for total charges. Once all charges and payments match the credit
card statement, you should have a difference of 0 here which is our goal.
Behind the scenes, QuickBooks will mark all of the charges and payments
that have been reconciled as cleared. So we’ll go ahead and click the finish now
button to generate the credit card reconciliation report which we’ll take a
look at next. Alright here is our credit card reconciliation report. So the
top section here is a summary of the items that cleared for charges and for
credit card payments. And then down below is each individual item that cleared the
credit card statement for this month. Now I want to share with you a couple of
tips when it comes to reconciling your credit card accounts. Tip number one: it’s
important that you save all credit card reconciliation reports for every credit
card account. To do this you can create a folder for each credit card account and
keep these reports in the folder. For more tips on how to organize key
financial reports and humans check out our small business
bookkeeping guide. You can click the link below to access this guide.
Tip number two: credit card reconciliation reports are one of the top five reports
that auditors will request from you during an audit. In my experience as an
auditor, if you are not able to provide these reports that audit may not go well
for you. Now let’s talk about 8 troubleshooting tips for reconciling
credit card accounts in QuickBooks Online. You want to go ahead and try some
of these tips if you’re having trouble getting to the 0 difference.
Tip number one: if possible narrow the search down to transaction type. Figure out if
you are out of balance with the charges or with the payments. If you’re out of
balance for both charges and payments, which is tip number two, tackle them
separately. In other words balance your charges first and then move on to your
payments or vice versa. Tip number three: look for the exact
dollar amount that you are off. For example if your difference is $50 then
look for a transaction for this amount on your credit card statement, and then
look for this amount on the charges section and the payments section of the
reconcile window. Tip number four: triple check the information that you entered
from the credit card statement and that would be your ending balance and the
ending statement date. Remember, either one of these — if either piece of
information is incorrect this will cause you to have an out of balance. Tip number
five: check to see if there are any transactions in the reconcile window
that you did not select. If the transaction is on your credit card
statement, then make sure the radio button next to it is selected. 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. For a missing charge, enter
it as you normally would. In 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. Click this link to access
this video tutorial. If the missing transaction is a payment, enter it as you
normally would. In our how to enter credit card payments lesson we walk you
through step by step how to enter credits into QuickBooks. Click this link
to access this video tutorial. Tip number seven: take a break. If you’ve been
at it for a while and you need a break clicking the finish later button will
save the work you’ve done so that you can easily pick up where you left off.
Sometimes taking a breather and coming back and help you spot what’s causing
the difference. And finally tip number eight: while it might be tempting,
I recommend that you don’t click that reconcile button until you have a
difference of 0. The problem will not go away. The difference will just carry
over to the next month until you figure it out. If you do happen to hit the
reconcile button by accident and you’ve not figured out the 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, for example $5 or less, then it might be worth your
while to move on. At the end of the day you get to determine what amount you’re
comfortable with. Reconciling your credit card accounts does not change your
financial statements. However in the credit card register, reconcile charges
and payments will be marked with the letter R as you can see here. 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 categorized something as a registration fee, and it should have
been office supplies, you can definitely make that type of change without
impacting your financial statements. But you do not want to make any changes
to the amount field or the date field. 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
QuickBooks Online course or any of the other lessons in this series, click this
link. You can also find a link below this video for a free 30-day trial of
QuickBooks Online. If you have feedback about this course or if you have any
questions please leave a comment below. Also don’t forget to subscribe.

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8 thoughts on “How to Reconcile Business Credit Card Accounts in QuickBooks Online

  1. Question, please I know I owe the credit card on my statement $5K , but quick books shows it as $5K, but not -$5K , why would this be and does the display 5K from Quick Books shows as a Liability or not? Thanks

  2. Last tip…some times the download date differs from credit card dates on your statements. Simple: let the credit card date rule! 🙂

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