Reconcile Credit Cards in QuickBooks

reconcile a credit card in quickbooks

Understanding how to reconcile credit cards in QuickBooks online and on a Desktop is vital to efficient bookkeeping. When performing reconciliation of credit cards users ensure that the transactions entered in the software match their credit card paper statement.

reconcile a credit card in quickbooks

This blog will show you step-by-step instructions on how to act on the application. But first, we shall cover the important aspects to remember about the credit card reconciliation process.

Why Do You Have to Reconcile Credit Cards in QuickBooks?

There are several reasons why you would wish to include credit card payments in the software. However, you need to reconcile a credit card in QuickBooks before you can proceed. When recording payments and transactions, can help prevent mistakes.

  • There will be no missing entries.
  • Wrong entries can be found and deleted while performing the reconciliation process.
  • It enables users to remove duplicate entries of credit card transactions. 
  • It helps in identifying incorrect amounts.

How to Reconcile a Credit Card in QuickBooks Desktop?

You may use the banking option to reconcile credit cards in QuickBooks Desktop. This activates a menu that has a reconcile option. It allows you to add accounts and select your desired credit cards for them. The statement date is automatically filled in by the software. The remaining information can be added manually. Finally, you can check and verify the balance of the statement to complete the reconciliation. 

  • The first step is to select the “Banking” option.
  • Choose “Reconcile” within it. 
  • Select “Account”.
  • You will notice “Credit Card” 
  • Choose an account. 
  • The statement date should be filled out automatically. 
  • If needed, modify the statement of the bank. 
  • QuickBooks Desktop will add the beginning balance. 
  • In the “Ending Balance” enter the same value as given in the bank statement. 
  • If required, then enter the “Service Charge” and “Interest Earned”, if not included earlier. 
  • Verify all information and then hit “Enter”.

The process of reconciling the credit card account will begin. Certain fields must be marked manually. The Reconcile Now button can then be selected.

Note: It’s crucial to understand that partial payments might be equal to full ones. There may be an inconsistency in the amounts. Therefore, you may apply the same technique to reconcile a credit card in QuickBooks Desktop for partial payments. This means that you can complete the procedure for the account and include the information about these payments.

Ways to Reconcile a Credit Card in QuickBooks Online?

You need to compare data entered in QuickBooks once you receive your credit card statement. If they match, then your accounts are correctly balanced and correct. It is recommended to reconcile your credit card every month for accurate entries. 

Step 1: Analyze your Opening Balance

If you are performing credit card reconciliation in QuickBooks for the first time, you need to analyze your opening balance. It has to match your bank statement from the day you begin recording entries.  

Important Note: When you link your bank and credit cards to online banking, QuickBooks will automatically retrieve transactions and fill in your opening balance. There’s no need to be concerned about the opening balance.

Step 2: Begin the Reconciliation Process

  • Ensure that all downloaded entries are categorized if your accounts are linked to online banking
  • Open QuickBooks, Go to “Setting”, and choose “Reconcile. If it is your first reconciliation process choose “Get Started” to begin. 
  • From the “Account” dropdown menu choose the account for reconciliation. Ensure it is similar to the one given in the statement. 
  • The beginning balance should match in QuickBooks as per the statement. 
  • When the statement is received enter the ending balance and the end date
  • Review the ending date of the last statement. The current statement should begin after that date. 
  • Begin reconciling once you have verified all information.

Note: In case you see any message relating to the preceding QuickBooks online credit card reconciliation during any step, you need to select “We can help you fix it”. You must do this step to proceed ahead. 

Step 3: Match the statement with QuickBooks

This step is when you need to match the statement transactions with the ones entered in QuickBooks. You need to go over them individually to ensure that all dates and transactions are correct in the software so everything matches. 

Step 4: Analyze the previous reconciliation

If you want to review your data or work you can simply click on “Run a reconciliation report”

Go to “Settings”

Select “Reconcile” 

Choose “History” 

Select the “Account”

The dropdown will allow you to select the account and the date range. You can also take a printout as well.

Why is QuickBooks Credit Card Payment Not Showing Up in Reconciliation?

Some factors are responsible for credit card payments not showing up at the time of reconciliation. 

  • The transaction is already been reconciled.
  • The statement date is current and correct when starting the reconciliation window.
  • The transaction has never been included or omitted. 
  • The user forgot to manually record the transaction or payment. 

You can open the payment and change the account to any other account to resolve this issue. Once done, save it and exit. Open the transaction and revert it to the original invoice. Refresh the session and continue with the reconciliation process.

The Bottom Line on QuickBooks Online Credit Card Reconciliation

It is a good idea to reconcile credit card statements in QuickBooks every month. This helps in eliminating errors linking to transactions. It is recommended that the reconciliation process should be done as soon as the bank statement is received. This step-by-step guide will help you get started on the reconciliation process for better bookkeeping relating to credit card entries.

Frequently Asked Questions – FAQs

What is Credit Card Reconciliation in QuickBooks?

The process of verifying that credit card transactions match those that appear in your general ledger is known as credit card reconciliation.

What are the types of QuickBooks Credit Card Reconciliation?

Credit card transactions can impact both income and expenses. Hence, there are two different types of reconciliations. The credit card statement and CC merchant service.

Why is Reconciling Credit Cards in QuickBooks Important?

Reconciling credit cards in QuickBooks shows the accuracy of financial records. It helps to eliminate fraud as well.

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