Reconciling the credit card in QuickBooks is a crucial step for good bookkeeping. By reconciling the credit cards, users can make sure that the credit card activity matches the activity on the credit card statement in their QuickBooks account. To make the reconciliation process easy, we have come up with this guide on how to reconcile credit card in QuickBooks Online and Desktop.
With the best practice, we will help you to understand the procedure of QuickBooks reconciling the credit card, multiple credit cards, credit card payments, and partial payment in QuickBooks.
- QuickBooks Reconcile Credit Card Process
- Important Things to Remember When Reconciling Credit Cards
- How Do I Reconcile Credit Cards in QuickBooks?
- Step 1: Open the Credit Card Reconciliation Screen
- Step 2: Enter the Statement Details
- Step 3: Match Your Credit Card Transactions
- Step 4: Confirm the Difference
- How to Reconcile Credit Cards in QuickBooks Desktop?
- How to Reconcile Multiple Credit Cards in QuickBooks Online?
- Way 1: Create Bank Account as a Parent and the Other Account as a Sub-account
- Way 2: Reconcile Account and Add the Adjustment for the Difference
- How to Reconcile Credit Card Payments in QuickBooks Online?
- How to Reconcile Credit Card Partial Payment?
QuickBooks Reconcile Credit Card Process
To reconcile the credit card account, you need to input the ending statement balance. Thereafter, you can match your transactions to the transactions on the statement in your QuickBooks account. When all your transactions appear as Cleared on the statement then the cleared balance of QuickBooks will match your statement balance. At this point, your account gets reconciled.
Important Things to Remember When Reconciling Credit Cards
- Locate the missing transactions: If the transactions on the statement are not entered in your QuickBooks account then you will have to enter it before you reconcile your account.
- Recognize the incorrect amounts: If the transaction is the same but the amount is different in QuickBooks and the bank statement then such accounts will not be reconciled.
- Find duplicate transactions: By checking the transactions for a month that did not show up on the bank statement, you can easily recognize the transactions that should not be in the QuickBooks account.
- Find fraudulent charges: If there are any modifications on the bank statement that are not available in QuickBooks, you should examine if there are legitimate charges.
How Do I Reconcile Credit Cards in QuickBooks?
To reconcile credit cards in QuickBooks, one has to perform a few simple steps. First of all, you need to select the Accounting menu, click on the Reconcile option, choose the account to reconcile, add statement information, match credit card transactions. Thereafter, you can confirm that the difference becomes Zero and then make a payment on your credit card balance.
To know how to reconcile credit card in QuickBooks with step by step guide, you can follow the steps mentioned below:
Step 1: Open the Credit Card Reconciliation Screen
- Launch “QuickBooks Online” account.
- Now, hover your mouse cursor over the “Accounting” menu located on the left.
- Then, select the “Reconcile” option.
Step 2: Enter the Statement Details
In the reconciliation window, do the following:
- Account: Choose the credit card account that you want to reconcile.
- Last statement ending date: Here, QuickBooks shows the ending date of your last statement that was reconciled for your credit card account. This should be noted that you will not see any date if this is your first-time reconciliation for this credit card.
Note: The reconciliation should start with the reconciled balance from your last month. Thus, you cannot skip months. If it has been so many months since you reconciled then you have to go back to your prior reconciled statement and start working forward one month.
- Beginning balance: QuickBooks also shows the ending balance of your last statement reconciled. This should also be the beginning of your current statement. Remember if this is you are reconciling this credit card then the amount will appear as Zero.
Important Note: To get started with reconciliation, you need to make sure that the beginning balance that is calculated by QuickBooks should match the ending balance on your last statement reconciled. If the transactions in QuickBooks reconciled before have been altered then this amount could be off. If you find the beginning balance different then
- Ending balance: Here, add the ending balance from the credit card statement.
- Finance charge: You should add the finance charges (if available) from the credit card statement. Then, indicate the date when the charge was assessed and the category or the expense account will be recorded by QuickBooks once the reconciliation is finished.
As you enter all the required information for your credit card statement, you can hit the Start reconciliation button.
Step 3: Match Your Credit Card Transactions
When you see a summary of reconciliation on the top and a detailed transaction at the bottom, you are required to match the credit card transaction to the transaction of your credit card statement.
- Statement ending balance
- Cleared balance
- Cleared transaction
The process of matching transactions from your QuickBooks to the statement requires tracing transactions. You need to check each transaction available in your QuickBooks and find it on the credit card statement.
Step 4: Confirm the Difference
When you are done selecting the transaction in QuickBooks on the credit card statement, you should see the difference as Zero between the statement ending and cleared balance.
After following these steps, QuickBooks will show you a reconciliation window showing the status of your account has been reconciled. Thereafter, you can create a payment on the credit card balance although this is optional.
How to Reconcile Credit Cards in QuickBooks Desktop?
Before entering the credit card payment, it is important to reconcile the credit card. This prevents you from errors and makes the payment entering process easier. If you are using QuickBooks Desktop and want to reconcile credit cards, you can perform the following steps:
- First of all, choose the credit card account that you want to reconcile.
- Now, select the statement date by using the calendar dropdown.
- Here, add your ending balance as it displays on the credit card statement.
- After this, enter your finance charges or interest fees. Make sure you choose a date when the finance date is charged. Also, select the account such as Interest Expense in order to categorize the financial charge.
- Hit the “Continue” button. This will take you to the bank reconciliation window. You will see the cash advances and charges related to your credit card on the left while the credits and payments will display on the right.
Note: Make sure you check each line of your credit card statement. For every transaction on the credit card statement, you need to find the matching transaction in your QuickBooks account and click on it. You can continue doing this until all the transactions are selected on the credit card statement.
When all the transactions are marked, you can reach the bottom on the right side of your screen. Here the Difference must be Zero. If you don’t see the difference (as 0), you should check all your steps if you have entered the right ending balance. Also, make sure that you don’t miss any transactions.
- Once you see the Difference is 0 then it indicates the account is now balanced. Then, you can hit the “Reconcile Now” button.
- On the next screen, you can click on the “Write a check for payment now”. This makes adding credit card payments easy.
- Then, hit the “OK” button.
After following these steps, you may see the popup for your reconciliation report. You can print or view your summary reconciliation report if needed. These are the steps for how to reconcile credit card in QuickBooks Desktop.
How to Reconcile Multiple Credit Cards in QuickBooks Online?
QuickBooks also allows you to reconcile two credit cards on the combined statement. All you have to do is set up your first bank account as a parent and the other account as a sub-account. Alternatively, you can perform a force reconciliation. For that, you will have to reconcile the account and create a new transaction adjustment.
Here, we will show you both the ways in the following steps:
Way 1: Create Bank Account as a Parent and the Other Account as a Sub-account
- Click on the “Banking” option or “Transactions” option.
- Then, click on the “Connect” option or choose the “Add account” button in case you have not created an account.
- Locate your bank.
- Hit the “Continue” button.
- Then, add your username and password that you use for the bank website.
- Now, click on the type of account that you wish to add.
- Click the date range for downloading transactions. Some banks let you download the transactions of the last 90 days while others let you go back to 24 months.
- Hit the “Connect” option.
When you are done connecting to online banking, you need to make sure how the bank shares the downloaded transactions with you. If your transaction is downloaded to only one account then you can connect it to the parent account only. But, if the transactions are being downloaded to the individual accounts, you can connect your sub-accounts to it but not the parent account.
What If Opening Balance is Incorrect?
In case your opening balance is not correct then you can delete the balance by using the following instructions:
- Click on the “Accounting” menu located on the left panel.
- Then, choose the “Chart of Accounts” option.
- Click on the account.
- Then, click on the “View register”.
- Select the “Edit” button and delete your opening balance.
- Hit the “Save” button.
Once you are done following these steps, you need to reconcile the parent account. By doing so, all the transactions will roll up in the sub-accounts.
Way 2: Reconcile Account and Add the Adjustment for the Difference
- Click on the “Gear” icon located on the top right.
- Select the “Reconcile” button from the “Tools” section.
- From the “Account” drop-down menu, choose your account.
- Add the “Ending Date” and “Ending Balance” options.
- Click on the “Start reconciling” option.
- Hit the arrow button located next to the “Save for later”.
- Choose “Finish now”.
- When you see a pop-up window, click on the “Add to adjustment and finish” or click the “Go back” buttons.
When all your transactions match with the statement, you can add the adjustment to your parent account. Also, you will have to reconcile your parent account only because all the transactions will roll up into the subaccounts.
How to Reconcile Credit Card Payments in QuickBooks Online?
You may have several payments listed as credits that throw the balance off. In such cases, you will have to remove the transaction and then recreate it. But, make sure that you copy the details before removing the transactions.
Remove and Recreate the Transaction
- Locate your translation and then open it.
- Click on the “More” button.
- Select the ”Delete” button.
- Hit the “Yes” option to confirm that you are deleting this transaction.
Reconcile the Transactions
- Click on the “Accounting” option from the left menu bar.
- Then, select the “Chart of Accounts” option.
- Click on the relevant “Bank Register” and choose the “View Register”.
- Click on the re-created transaction from the “Bank Register” window.
- Now, select the empty box under the “Check” icon.
- Hit the “Save” button.
This is how you can delete the transactions, you can create them again. Thereafter, you can reconcile the transaction manually.
How to Reconcile Credit Card Partial Payment?
When the bill for the previous month is not paid in full, you can still reconcile your credit card. All you have to do is click on the Plus icon, go to Pay Bills, and edit the partial payment to change it to the exact amount you have paid. Thereafter, you can reconcile your credit card.
You can also use the Write Checks feature if you want the transaction to appear in the register along with your charges. This way you can reconcile them.
To know the whole procedure of QuickBooks reconcile credit card partial payment, you can pursue these steps:
Edit the Partial Payments
- Click on the “Plus” icon.
- Then, select your “Pay Bills” option.
- Here, start editing the partial payments.
- Make sure you change the payment to the exact amount you have paid. Once done, your amount will display correctly while reconciling the credit card.
Recommended: Use Write Checks Feature
- Go to the “Banking” option located on the top menu bar.
- Then, select the “Write Checks” option.
- Search for the “Bank Account” drop-down menu and click on the account that you wish to use to make payments.
- Add the date.
- Choose your company’s name using the “Pay to the order of” drop-down.
- Add the amount.
- Click the “Expenses” tab.
- Select your credit card.
- Hit the “Save and Close” button.
As you follow these steps, your transaction will show up in the register along with other details such as charges. Thereafter, you can easily reconcile them.
To Wind Up
So the basic way to reconcile your credit card in QuickBooks is to input the ending statement balance. Thereafter, you can match your transactions to the transactions on the statement in your QuickBooks account. Here, we have talked in detail about how to reconcile credit card in QuickBooks Online and Desktop. Besides that, we have explained the procedure of reconciling multiple credit cards, credit card payments, and partial payments.
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