Old or Unusual Amounts on Reconciliation

Old or Unusual Amounts on the Reconciliation

Although it is possible to reconcile the bank account each month to a difference of zero that does not necessarily mean that the bank account balance is correct.  For most small businesses most check are issued and cashed shortly there after.  For bank deposit there may be a day or two lag, but that should be it.  When the outstanding deposits and outstanding checks are reviewed when the bank account is reconciled, most should be very current.  If there are transactions that are old, or unusually large, this should signal the need to investigate the situation more closely.

For old transactions, confirm that the entry has not been inadvertently duplicated.  If it does not appear that that is the problem, further investigate what has happened.  If the deposit is missing from the bank statement for example, this may mean contacting the customer to see if the check has cleared their bank account.  If it is an old check, which might mean contacting the vendor to see if they still show an outstanding amount due.  Once the situation has been determined, the next step is to reflect the activity correctly in QuickBooks. 

In most situations that DOES NOT mean voiding the transaction.  In QuickBooks if a transaction is voided, it is removed as of the original transaction date of the entry. 

If the check, for example, is three years old, the vendor does not show any outstanding amount, and it just needs to be removed from the bank reconciliation since it appears that it has been cashed but incorrectly reconciled at some point in the past, a deposit with the current date should be entered.  When the next bank reconciliation is done, the check and deposit can both be marked as cleared (net amount of zero) to remove them from the bank reconciliation screen in the future.

 

More information on this topic

Reconciliation

Reconciliation Issues