Each month or quarter or some other consistent period of time, you, as the bookkeeper for your business, should be reconciling all cash and credit accounts to the corresponding periodic closing statements.

This bookkeeping task is crucial to let the reader of your financial statements know that you have verified all cash and credit transaction amounts to independent 3^rd party statements (such as a bank or credit card statement).

Once a transaction has been officially reconciled, then there should not be a need to change this transaction amount after the reconciliation process has completed. However, unfortunately, there are times when you are going to have to deal with an issue of a changed already-reconciled transaction in your books; thus your bookkeeping priority should now be to correct this back to what the official cleared amount was.

In QuickBooks Online, when you go to your reconciliations screen to begin this task (Gear icon>Tools>Reconcile), there will be a warning in red letters that states “Your account isn’t ready to reconcile yet”, “Your beginning balance is off by $…..”. This warning will let you know that you need to correct (the change to) a previously-reconciled transaction or more in your books before you can proceed with the next reconciliation process for that account (such as a bank or loan account).

In the old days, you pretty much had to search blindly for the transaction that was causing the issue of your beginning (reconciled) balance to be off. But nowadays, in QuickBooks Online, you can get help with this by clicking on the hyperlink “We can help you fix it”.  Once you click on this link, it will open up another screen that gives to you a list of previously-reconciled transactions that were changed or altered in a monetary way. The information on this screen also includes the following:

• What the reconciled amount was
• What the new amount is
• The difference between the reconciled amount and the new amount
• The change type (this is important if the reconciled amount was deleted or simply just altered).
• A “View” link to the transaction’s history (this will let you know who posted the change or deletion for this transaction).

To correct, just change this amount back (to the correct amount per the closing statement), then reconcile again to the previous statement’s ending balance.

Note: AccuraBooks is a bookkeeping firm only, so please consult with your C.P.A. for verification and clarification about the contents of this article.