Your bookkeeper says the bank and credit card accounts have been reconciled.
As the owner, you do not need to redo the work. But you should know how to confirm that it was completed correctly.
A reliable reconciliation should show that:
- The correct account and statement period were reconciled
- The ending balance agrees with the bank or credit card statement
- No unexplained adjustment was used to force a zero difference
- Old outstanding transactions were reviewed
- Reconciled transactions were not changed without explanation
This is not micromanaging your bookkeeper.
It is responsible financial oversight.
A Cleared Bank Feed Is Not a Reconciliation
The bank feed brings transactions into QuickBooks so they can be matched or categorized.
Reconciliation is a separate process that compares QuickBooks with the bank or credit card statement for a specific period.
There are three different levels of completion:
The bank feed is cleared
Downloaded transactions have been addressed, but the account may not be reconciled.
The reconciliation difference is zero
The math balances, but adjustments or old outstanding items may still require review.
The reconciliation is complete and supported
The statement date and balance agree, outstanding items are reasonable, no unexplained adjustment was used, and a reconciliation report was retained.
That third level is what the owner should expect.
Review the Reconciliation Report
Each reconciled bank and credit card account should have a reconciliation report showing:
- The account
- The statement ending date
- The statement ending balance
- Cleared transactions
- Outstanding transactions
- Any difference or adjustment
In QuickBooks Online, open the reconciliation area and select History by account or the reconciliation history option.
Then:
- Select the account.
- Choose the statement period.
- Open the reconciliation report.
- Compare it with the bank or credit card statement.
Menu names may vary slightly by interface and access level.
Start by confirming that the account, statement date, and ending balance are correct.
Confirm the Correct Period Was Reconciled
If you are reviewing the June close, confirm that the reconciliation was completed through the statement ending in June.
Watch for:
- The wrong statement date
- A missing month
- A reconciliation completed only through an earlier period
- An ending balance that does not match the statement
- An account that was not reconciled
An account can be described as reconciled even when the most recent statement was never completed.
The date and balance provide the proof.
Check for an Unexplained Reconciliation Adjustment
A reconciliation should reach a zero difference because QuickBooks agrees with the statement.
When it does not balance, the difference should be investigated.
Common causes include:
- Missing or duplicate transactions
- Incorrect amounts or dates
- Activity posted to the wrong account
- Changes to previously reconciled transactions
- An incorrect beginning balance
When an adjustment is entered only to create a zero difference without resolving the cause, the reconciliation has effectively been forced.
The entry may appear as:
- Reconciliation Adjustment
- Reconcile Discrepancies
- Adjustment
- Discrepancy
- A journal entry created during the reconciliation
An adjustment is not automatically improper. In rare cases, a researched and documented adjustment may be necessary.
But it should never be unexplained.
How to Review a Reconciliation Adjustment
Open the reconciliation report and look for an adjustment or discrepancy entry.
You can also review the account register or search transaction details for terms such as:
- Reconciliation Adjustment
- Reconcile Discrepancies
- Adjustment
- Discrepancy
If you find one, ask:
- What caused the difference?
- What was investigated?
- Why was the adjustment necessary?
- Which account was used?
- Is supporting documentation attached?
- Who approved it?
- Will it need to be corrected later?
“We could not find the difference, so we adjusted it” is not a sufficient explanation.
Review Old Outstanding Transactions
A reconciliation can have a zero difference and still contain old checks, deposits, transfers, or payments.
Some outstanding activity is normal. A check issued near month-end may clear the following month.
The concern is activity that remains outstanding longer than expected.
Look for:
- Checks outstanding for several months
- Deposits that never reached the bank
- Transfers appearing in only one account
- Electronic payments that should have cleared
- Reissued transactions that were never corrected
- Duplicate deposits or payments
Ask what each older item represents and whether it is still valid.
An old transaction may need to be reissued, corrected, voided, or removed as a duplicate. Do not delete it simply because it is old.
Confirm what happened, make the correct change, and add notes in QuickBooks when needed.
Check for Changes After the Reconciliation
A completed reconciliation can be damaged later if someone changes a reconciled transaction.
Examples include:
- Deleting the transaction
- Changing the amount or date
- Moving it to another account
- Removing its reconciled status
- Replacing it with a different entry
These changes may create a beginning-balance discrepancy in the next reconciliation.
The QuickBooks Audit Log can help identify:
- Who changed the transaction
- When it was changed
- What action was taken
Legitimate corrections happen. But changes to reconciled periods should be reviewed and documented.
Require Proof of Completion
For each bank and credit card account, the monthly-close file should include:
- The bank or credit card statement
- The reconciliation report
- Confirmation of a zero difference
- An explanation of older outstanding items
- Documentation for any adjustment
- Notes about corrections or unresolved issues
The owner or designated reviewer can then approve the work without redoing it.
This creates accountability while allowing the bookkeeper to remain responsible for the technical process.
Use a Simple Owner Review
For each account, confirm:
- Was it reconciled through the correct statement date?
- Does the ending balance match the statement?
- Is the difference zero?
- Was an adjustment used?
- Are any old transactions still outstanding?
- Were reconciled transactions changed later?
- Is the reconciliation report retained?
Clear, supported answers provide reasonable evidence that the account was reconciled correctly.
Trust Should Include Verification
A good relationship with your bookkeeper requires trust.
It should also include a clear process for verifying that critical financial work was completed.
A cleared bank feed is not enough. A zero difference alone is not enough.
A reliable reconciliation is supported by the correct statement, a completed report, reasonable outstanding activity, and no unexplained adjustment.
That is how an owner confirms that the books were not only marked complete, but reconciled correctly.
If reading this made you realize you genuinely do not know whether your accounts are reconciled correctly, that is not a workbook problem, that is a conversation. Book a free discovery call and let’s look at your books together so you know exactly where you stand.
