Project Accounting Series: Bank Reconciliation in QuickBooks Online

Bank reconciliation is the process of comparing and matching financial records from different sources to ensure that all transactions have been recorded accurately.

In my work, reconciliation means comparing cash transactions recorded in three places:

• Bank Mandiri statements
• Google Sheets
• QuickBooks Online

Only transactions that directly involve money moving into or out of the bank account are included in the reconciliation process.

The main objective is to make sure that the cash balance recorded in Google Sheets and QuickBooks matches the balance shown in the bank statement.

Transactions that do not involve cash movement through the project's bank account do not need to be reconciled. For example, some project expenses may be entered directly into QuickBooks by the Headquarters office without any funds being transferred through the local project bank account.

Preparing for Reconciliation

Before starting the reconciliation process, it is helpful to prepare:

• The bank statement for the current month
• The Google Sheets expense tracker for the same period

One important function of the spreadsheet is to record all cash payments made from the bank account. Therefore, make sure that every outgoing transaction shown in the bank statement has also been recorded in the spreadsheet, including:

• bank charges,
• administrative fees,
• taxes,
• and other deductions.

A Note About Advances

In project accounting, advances often require special attention.

An advance may be paid during the current month, but if it has not yet been accounted for and supported by receipts or supporting documents, it has not yet become an actual expense.

Although the money has already left the bank account, I usually do not include the advance in the reconciliation of project expenses until it has been properly settled and documented.

From a practical perspective, this approach makes it easier to identify the actual expenses that occurred during the reporting period.

Figure (1)

Starting the Reconciliation Process

To begin the reconciliation process in QuickBooks Online:

1. Click the Accounting menu on the left side of the screen.
2. The screen will appear as shown in Figure 1.
3. Find the project account that you want to reconcile.
4. Click View Register for the appropriate account.

Figure (2)

In my example, I selected the account shown under code 1080, and the screen appeared as shown in Figure 2.

Next:

1. Click Reconcile.
2. The screen will appear as shown in Figure 3.

Figure  (3)

Entering Reconciliation Information

On the reconciliation screen, complete the following fields:

Ending Balance

Enter the ending balance shown in QuickBooks.

For example:

$21,837.13

This balance is displayed in US Dollars because the project account is maintained in that currency.

Ending Date

Enter the last day of the reporting period.

For example:

31 January 2018

After entering both fields, click Start Reconciling.

Figure  (4)

Matching Transactions

The next screen will appear as shown in Figure 4.

To ensure that all transactions are visible:

• Click Reset Statement Ending Date if necessary.
• Review all deposits (cash inflows).
• Review all payments (cash outflows).

Place a check mark next to each transaction that matches the bank statement.

Continue until the value shown in the Difference field becomes:

0.00

When the difference reaches zero, the reconciliation is mathematically complete.

However, it is still important to perform one final review.

Verifying the Results

Even when the difference shows zero, I usually compare the totals with my Google Sheets records.

For example:

• Total cash out (expenses): $15,930.69
• Total cash in (deposits): $16,911.08

These amounts should match the totals recorded in the spreadsheet for the same period.

If:

• the Difference value is zero, and
• the cash inflow and cash outflow totals agree with the spreadsheet,

then the reconciliation can be considered successful.

Completing the Reconciliation

Figure (5)

After confirming that everything is correct:

1. Click Finish Now.
2. QuickBooks will save the reconciliation.
3. The confirmation screen will appear as shown in Figure 5.

At this point, the reconciliation process has been completed successfully.

Final Thoughts

Regular bank reconciliation is one of the most important tasks in project accounting.

By comparing bank statements, spreadsheets, and QuickBooks records, we can quickly identify missing transactions, recording errors, or inconsistencies before they become larger problems.

Although reconciliation requires patience and attention to detail, it helps ensure that project financial records remain accurate, reliable, and ready for reporting.

Thank you for reading, and I hope this article is helpful for anyone working with project accounting and QuickBooks Online.