In the olden days (let’s say the 80’s), your mom used to balance her checkbook so that every transaction was accounted for. Then, ideally, the checkbook would match the bank statement at the end of the month. Reconciliation does the same thing.
Reconciliation guarantees that your accounting records match up with your bank statements (both beginning and end balances). You reconcile by verifying every transaction–with ZipBooks, reconciling is a snap!
Here’s how to reconcile your bank:
1.Log in to ZipBooks and select Transactions from the menu.
2. Then click on Reconciliation. A list of your bank and merchant accounts will appear, along with the months that you have transaction data for. The months that have blue check marks above them have been reconciled.
3. Scroll to the bank account you need, and click on the month you want to reconcile.
4. You’ll see the balance ZipBooks shows for the beginning of the month, the change recorded during that month, and the resulting ending balance. On the next line, you’ll see the same data for the account you’re reconciling. Enter the beginning balance (which will already be there if you’ve reconciled the month before), and the ending balance from your bank statement.
5. In the box on the right, you’ll see the number of transactions that are unconfirmed. You’ll see a list of transactions below the balances. Look at the first transaction on your bank statement and find the same one on your ZipBooks account. Click the check mark inside a circle on the right side to verify this transaction (green checkmarks have been reconciled, clear checkmarks have not). Do this for every transaction on your bank statement. You can also bulk confirm transactions to save time.
6. When you’re finished, the box to the right of the balances will show the difference in the two ending balances. If your account is properly reconciled, the two balances will be the same.
7. If a certain transaction from your bank statement is not in your ZipBooks account, add the transaction by clicking the round green + button. Then find the transaction in the list and click the checkmark to clear it.
This is the beauty of cloud-based accounting products like ZipBooks! They seamlessly sync with your bank, pulling in every transaction automatically. All you have to do is file each transaction in a category, then verify that it really happened (or reconcile it).
On occasion, the syncing systems aren’t perfect—either the bank connection was off or someone in the accounting system did something wrong. This is why we reconcile.
Note: In order to take advantage of our reconciliation module, you’ll need to be on our Sophisticated plan—click here to upgrade. However, you can still go through all the necessary steps for reconciliation from your Transactions list.