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How to handle a minor discrepancy in reconciliation?

Forum|Forum|2 years ago
October 20, 2023
7 replies
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Hello! I have a very small discrepancy in my September reconciliation that I have been unable to solve. The amount is .04 (yes 4 cents!) but it is throwing me off and I fear will cause an issue with October's reconciliation. I have combed through the bank statement and our company's QB register but unable to find the error. I played around with how to make the Difference = 0, I added .04 cents as a credit to our ledger, but I am unclear what to call this type of entry. Attached is a screen shot of the register. Note that I did not check the .04 cent entry which is highlighted. Once I select it, September will be reconciled but I am not sure if that is the right thing to do. Any thoughts or is there a better approach?

Thank you so very much!

17907-RECONCILIATION-DISCREPANCY.pdf

QuickBooks Desktop

Best answer by Emma_P

How do I handle a small reconciliation discrepancy in QuickBooks that I can't find, like a few cents?

If you've hit a dead end on a reconciliation difference, QuickBooks can post a small adjusting entry to force it to balance. Keep in mind this is not a first move and should be considered a last resort. The recommended approach is looking for the actual cause first, since an adjustment hides the error instead of fixing it.
Once the difference hits zero this month, next month’s beginning balance will be correct as well. Here's the order to work through:

1. Look for the cause first

Confirm the ending balance and ending date you entered match your statement exactly.
Check for a duplicate, a missing transaction, or one that hasn't cleared the bank yet, and for any reconciled transaction that was later edited or deleted.
Review the changed transactions using the steps in Fix issues at the end of a reconciliation in QuickBooks Online. In QuickBooks Desktop, run the discrepancy report from the Reports menu, then Banking, then Reconciliation Discrepancy.

2. If it's small and truly unfindable, let QuickBooks post an adjustment

When only a small amount is left, finish the reconciliation and choose the option to add an adjusting entry.
QuickBooks posts it to a Reconciliation Discrepancies account so your ending and cleared balances match. Steps: Enter an adjusting entry for a reconciliation in QuickBooks Online.

Keep in mind the adjustment doesn't correct an underlying error, so if you later find the real cause, remove the adjustment and fix the transaction. If these differences keep appearing or start adding up, have your accountant take a look rather than adjusting each month.

Official sources drawn from:

L

lin_jcaj

Level 9

I appreciate your query regarding handling the discrepancy issue, jmaurer1.

Several potential factors could account for the discrepancy in your account balance:

Someone entered an incorrect ending balance at the start of the reconciliation.
Someone edited or deleted transactions that were already reconciled.
There are missing or duplicate transactions in QuickBooks.
Someone entered transactions into QuickBooks that haven't cleared your bank yet.
Someone adjusted your last reconciliation with a journal entry.

To handle a minor discrepancy in reconciliation in QuickBooks Desktop, you can run a reconciliation discrepancy report to review and identify the specific transaction(s) causing the imbalance.

Go to the Reports menu. Hover over Banking and select Reconciliation Discrepancy.
Select the account you're reconciling and then select OK.
Review the report. Look for any discrepancies.
Talk with the person who made the change. There may be a reason they made the change. Once you know, edit the transaction as needed.

If the discrepancy is substantial and you want to ensure the accuracy of your books, I suggest consulting with a professional accountant or bookkeeper. They can offer valuable guidance and explore alternative solutions to rectify the minor difference.

If you require further assistance managing reconciliation or related matters, reply to this thread. I am here to support you at any time.

J

jmaurer1Author

Thank you GlinetteC,

Thank you so much for your response! This is a new report to me and I appreciate learning more about the Report function in QB and other features. I ran the report and did not find the discrepancy as I had hoped, so I believe this could be a bank error, as the overage was not posted on the statement and the ending balance represents what would be the closing statement if the overage of .04 was correct. I've made the reconciliation so that this minimal amount will be reflected as a reconciliation discrepancy in an income account and now we are in balance. Enjoy the rest of your evening!!

J

jmaurer1Author

Hello Rainflurry!

You have always been so helpful with your replies and I appreciate the simple solution. Since .04 overage is a truly minor amount, I created a new Reconciliation Discrepancy - Income account in the chart of accounts so now the ending and cleared balances match. I have been learning so much with everyone's input within the community and it is very much appreciated!

Rainflurry

Level 11

@jmaurer1

When the amount is immaterial, you can assign that $.04 to income or an expense account so the reconciliation can be completed. Some people assign it to a "Reconciliation Discrepancy" or "Cash Over/Short" expense account and then move it to an income or expense account at year-end so it's not a separate line item on the P&L. It's really up to you but, yes, obviously you want to include it so that your Ending Balance and Cleared Balance match.

AlcaeusF

Level 14

Hello Rainflurry,

Thank you for sharing your input to help address the issue. We love to see members supporting one another! Have a great day.

Emma_P

Community Manager

How do I handle a small reconciliation discrepancy in QuickBooks that I can't find, like a few cents?

If you've hit a dead end on a reconciliation difference, QuickBooks can post a small adjusting entry to force it to balance. Keep in mind this is not a first move and should be considered a last resort. The recommended approach is looking for the actual cause first, since an adjustment hides the error instead of fixing it.
Once the difference hits zero this month, next month’s beginning balance will be correct as well. Here's the order to work through:

1. Look for the cause first

Confirm the ending balance and ending date you entered match your statement exactly.
Check for a duplicate, a missing transaction, or one that hasn't cleared the bank yet, and for any reconciled transaction that was later edited or deleted.
Review the changed transactions using the steps in Fix issues at the end of a reconciliation in QuickBooks Online. In QuickBooks Desktop, run the discrepancy report from the Reports menu, then Banking, then Reconciliation Discrepancy.

2. If it's small and truly unfindable, let QuickBooks post an adjustment

When only a small amount is left, finish the reconciliation and choose the option to add an adjusting entry.
QuickBooks posts it to a Reconciliation Discrepancies account so your ending and cleared balances match. Steps: Enter an adjusting entry for a reconciliation in QuickBooks Online.

Keep in mind the adjustment doesn't correct an underlying error, so if you later find the real cause, remove the adjustment and fix the transaction. If these differences keep appearing or start adding up, have your accountant take a look rather than adjusting each month.

Official sources drawn from:

Emma_P

Answer

Community Manager

How do I handle a small reconciliation discrepancy in QuickBooks that I can't find, like a few cents?

If you've hit a dead end on a reconciliation difference, QuickBooks can post a small adjusting entry to force it to balance. Keep in mind this is not a first move and should be considered a last resort. The recommended approach is looking for the actual cause first, since an adjustment hides the error instead of fixing it.
Once the difference hits zero this month, next month’s beginning balance will be correct as well. Here's the order to work through:

1. Look for the cause first

Confirm the ending balance and ending date you entered match your statement exactly.
Check for a duplicate, a missing transaction, or one that hasn't cleared the bank yet, and for any reconciled transaction that was later edited or deleted.
Review the changed transactions using the steps in Fix issues at the end of a reconciliation in QuickBooks Online. In QuickBooks Desktop, run the discrepancy report from the Reports menu, then Banking, then Reconciliation Discrepancy.

2. If it's small and truly unfindable, let QuickBooks post an adjustment

When only a small amount is left, finish the reconciliation and choose the option to add an adjusting entry.
QuickBooks posts it to a Reconciliation Discrepancies account so your ending and cleared balances match. Steps: Enter an adjusting entry for a reconciliation in QuickBooks Online.

Keep in mind the adjustment doesn't correct an underlying error, so if you later find the real cause, remove the adjustment and fix the transaction. If these differences keep appearing or start adding up, have your accountant take a look rather than adjusting each month.

Official sources drawn from:

How do I handle a small reconciliation discrepancy in QuickBooks that I can't find, like a few cents?

1. Look for the cause first

2. If it's small and truly unfindable, let QuickBooks post an adjustment

How do I handle a small reconciliation discrepancy in QuickBooks that I can't find, like a few cents?

1. Look for the cause first

2. If it's small and truly unfindable, let QuickBooks post an adjustment

How do I handle a small reconciliation discrepancy in QuickBooks that I can't find, like a few cents?

1. Look for the cause first

2. If it's small and truly unfindable, let QuickBooks post an adjustment

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