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How to fix an incorrect beginning balance when reconciling in QuickBooks Desktop

Forum|Forum|1 year ago
January 6, 2025
4 replies
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My beginning balance in December is $1M off from what it should be.

When i click unreconcile to look at November beginning balance, this is off but by a different amount-$1.1M.

I called QB. First, the people that answer the phones know nothing; they are messaging techs who then play telephone game to relay info - I cannot actually talk to a tech. Then i ask for supervisor, thinking as a supervisor they would have more knowledge but nope - they just takes feedback.

Their solution - do a Journal entry to force balance to be correct!!! WHAT?!?!?! Any accountant knows that is against GAAP and that it will not help to do a JE if the bank recons are wrong for months at a time; i need to know WHY they are wrong and fix it and watch for it in the future. At least the near futuree becuase we are DUMPING QB ASAP!
So i pulled audit report and those shows 2 items totally $2K so no help there.
Is there an acutal accoutant or somepne with knowledge of GAAP who can help me fix this correctly? I dont mind undoing recons and fixing them but i need to know how far back. If it is more than a year, i cannot.

HELP!!!

QuickBooks Desktop

Best answer by sofiamdc-2341

A journal entry forces the balance without fixing what actually changed, so you're right to look deeper. The beginning balance in the reconcile window is driven by your reconciliation history, which is why your balance sheet and register can look fine while the reconcile screen is still off.

What typically causes this

The account wasn't set up with the correct opening balance
A previously cleared and reconciled transaction was later voided, deleted, or modified
The company file was converted from QuickBooks Desktop for Mac or QuickBooks Online, which can leave some transactions unreconciled
Possible data damage

Step 1: Find what changed

Run these three reports to track down the source of the discrepancy:

Reconciliation Discrepancy report: Go to Reports, then Banking, then Reconciliation Discrepancy. Select the account and select OK. This lists every transaction that changed since your last reconciliation, along with when the change was made.

Previous Reconciliation report: Go to Reports, then Banking, then Previous Reconciliation. Select the account and the most recent statement date, choose Transactions cleared at the time of reconciliation, then select Display. Compare this against your actual bank statement for that period. Note the reconciliation creation date. You'll need it for the next report.

Audit Trail report: Go to Reports, then Accountant & Taxes, then Audit Trail. Set the Account filter to the account you're reconciling. For the Date filter, leave the From field blank and set To to the statement date. For the Entered/Modified filter, set From to the reconciliation creation date you noted above and To to today. This surfaces any changes made to a transaction after it had already cleared.

It's also worth checking the Reconciliation Discrepancies account in your chart of accounts. If a past reconciliation was force-adjusted rather than properly fixed, you'll see a journal entry there.

Step 2: Fix it at the source

Once you've identified the transaction, back up your company file first, then:

Go to Banking, then Reconcile.
Select Undo Last Reconciliation.
When prompted, select Continue, then OK.
Close out of Reconcile and reopen it to redo the reconciliation with the correct beginning balance.

If the transaction causing the problem is further back, you may need to undo more than one reconciliation in sequence, working backward until the beginning balance is accurate, then redo each one in order.

If you converted from another QuickBooks product

Reconciliation works differently in QuickBooks Desktop for Mac and QuickBooks Online. If this file was converted from either one, some transactions may have gotten unreconciled during the move, which throws off the opening balance. Worth ruling out before digging further.

Let us know which report you're looking at or what the discrepancy amount is — happy to help you work through it from there.

Resources:
Fix beginning balance issues in QuickBooks Desktop
Fix issues when you're reconciling in QuickBooks Desktop

RazzieE

QuickBooks Team

Hi @KfrankLESCO, Discrepancies can occur for various reasons, such as incorrect opening balances or duplicate transactions, leading to data inconsistencies. Let's discuss this further below.

You're correct in recognizing that using Journal Entries (JE) to force a balance can compromise the integrity and accuracy of financial reporting. To effectively resolve this issue, it's important to undertake a thorough review of your previous period transactions. By comparing these transactions with your past bank statements, you can gain a comprehensive understanding of discrepancies. You can check the options below to accurately address your beginning balance issues in QBDT:

Fix beginning balance issues in QuickBooks Desktop.

Reconcile Discrepancy report
Audit Trail report
Previous Reconciliation report

Following these steps, you can identify and correct the underlying issues causing the discrepancies.

You can consider reaching our QuickBooks ProAdvisor. They have the expertise in GAAP and QuickBooks to provide tailored assistance for resolving these errors correctly.

For future reference, you can visit this article to help you resolve any reconciliation discrepancies you may encounter: Fix issues when you're reconciling in QuickBooks Desktop.

If you need further assistance don't hesitate to reply in the comment section, the Community space is here 24/7.

K

KfrankLESCOAuthor

Doing a JE is not just compromising integrity, it is a violation of GAAP.

None of your solutions work as this error is on the recon screen beginning balance ONLY. My audit report is clean except for one $2K issue that we are aware of. Rebuilding data only showed that 2 reports had to be deleted.

My Balance Sheet, GL, and Check register are all correct. So, I can't do a journal entry to change balance. I need to know where the beginning balance on the bank recon report comes from as it is not the Bank general ledger account.

And the fact that no one at QB can help and your solution is to pay outside rep makes me wonder why we even have this system at all.

D

Dandie_A

QuickBooks Team

Thank you for taking the time to clarify further the concern you're encountering with the beginning balance on your bank reconciliation screen, KfrankLESCO. I acknowledge the importance of maintaining precise financial records and I am here to help you resolve this matter.

The beginning balance on the bank reconciliation screen is derived from the sum of all cleared transactions up to the last reconciliation date. If everything else in your QuickBooks like your Balance Sheet, General Ledger, and Check Register is correct, yet there's still a discrepancy in the starting balance of the reconciliation screen, this could indicate that there may have been errors in how previous reconciliations were recorded, or there could be existing issues within your company's data.

In case you haven't yet, run a reconciliation report if there's a change and can't trace them. This can help you identify if there have been changes to the previous period's transaction amounts that can be causing the beginning balance discrepancy. To run a reconciled report, here are the steps below:

Go to the Reports menu. Hover over Banking and select Previous Reconciliation.
From the Account drop-down menu, select the account you reconciled.
In the Statement Ending Date section, select the reconciliation period you want to review.
Select Detailed for the report type.
Select Transactions cleared plus any changes made to those transactions: This shows transactions in the account at the time of reconciliation. It also shows where they currently are in your accounts.
When you're ready to run the report, select Display.

For your future reference, you can refer to this article: Run a Previous Reconciliation Report.

On the other hand, if you don't find any issues in the report, this can be a company file issue. I understand you were able to run the Verify and Rebuild steps and if still doesn't fix the problem, I suggest reaching out to the QuickBooks Data Service Team for assistance in repairing your files.

Please don't hesitate to reach out if you have further questions or require additional assistance about beginning balance. We are here to support you and ensure that your experience with QuickBooks allows for seamless and accurate financial management.

sofiamdc-2341

Answer

Community Manager