081 | When It Just Won't Balance.
This month we are talking about #Reconciling and when it just won't balance.
Our last post highlighted a few problem spots when you are stuck on a reconciliation and today, we would like to break them down for you.
1. Backward Posting
One possibility is that you have inadvertently selected a debit and credit for the same amount, but they aren't meant to offset each other. For example, you may have an expense for $1,340 and a deposit for $1,340 and you inadvertently matched off against each other. The trick to this one, is to divide the amount that you are out by 2 and then look for that amount in your transactions. Let's say you were out by $2,680. Dividing it by 2 would give you $1,340 and you would see that in the list and know you posted one of the transactions backwards.
2. Transposition Errors
This common error occurs when numbers are switched. For example, you may have wanted to enter 35 for a transaction but entered 53. To find this error, it is an easy equation divisible by 9. Subtract the numbers and the sum will be divisible by 9. 53-35 is 18 which is divisible by 9. This can then be used to go back to the dollar amount that you are out and determine if it is divisible by 9 and indeed has been a transposition error.
3. Transactions Posted to the Wrong Bank Account
When recording an expense or deposit, your cloud accounting program offers you a dropdown selection of bank accounts. The issue that arises most often, is the software will default back to the last account used, but that doesn't mean it is the correct account. In addition, there is more than one dropdown in your transaction where you are asked for the bank account. Ensure you have selected the correct one when you see the dropdown menus.
When entering or posting, always assume the bank account should be changed for each entry and you will never fall into this trap. Double check it twice and never assume.
4. Double Entry
In this reconciliation trap, we are specifically referring to #Quickbooks and the methods available utilizing this #cloud accounting software. Double entry occurs when you match an item in your bank feed, such as an expense, and record it again as an expense through the vendor account. This will create two entries in the General Ledger. Both of these entries will appear in the reconciliation module and you will be able to see that you have made a mistake. When you fully reconcile a month, there should be no remaining unreconciled transactions in the reconciliation screen module. If there are, they don't belong and you will have to backtrack to determine why.
5. Missing Entries
If you are 100% sure that you have posted all items for the month, but are missing expenses or deposits, this issue requires the Sherlock Holmes approach. How do you find something that is missing but you are certain it's there?
The best trick we can offer you is to use the Audit Trail. This amazing feature in QBO tracks everything that you did and is a report feature you can refer to when you need to find something. Did you make a change, delete something, or were you in the middle of posting and encountered a glitch? We highly recommend starting with the Audit Trail.
**We hope that you found these Reconciliation Tips & Tricks useful when you find yourself stuck in the hamster wheel of bookkeeping looking for a missing penny 😁