Why Do Cleared Items Show up in QuickBooks Reconciliation?
Many entrepreneurial business owners undertake as much of the administrative workload of their company finances as possible, to save the cost of outside expertise. If you bought a copy of QuickBooks and dived in, assuming that its functions and processes work the way you expect them to, you may find yourself taking a wrong approach that requires expert assistance to untangle. One symptom of this "do-what-looks-right" process shows up when cleared transactions linger as uncleared in a reconciliation report.
When you reconcile your accounts with your QuickBooks data, you can base your procedure on the date of your most-recent reconciliation, or type in a statement date that represents the timing of a report from your financial institution. If you enter a future date, that date becomes connected with the past transactions you reconcile and can force them to become classified as uncleared. You can ignore these transactions and allow them to clear on their own as soon as the statement date you entered actually arrives, or you can correct the reconciliation date and resolve the discrepancy immediately. That correction requires that you undo and redo your reconciliation process. Back up your QuickBooks data before you take this step.
If you accidentally enter the same transaction twice, only one of the duplicates can clear correctly through account reconciliation, because only one represents the real debit or credit. Regular payments for the same amount every month or quarter can look like duplicates because of their repeated details. Real duplicates may be easier to spot if you use their amounts to find them. Void and clear these ghosts to stop them from disrupting your account balances.
Some unreconciled items represent uncashed checks. Before state laws governing unclaimed property force you to report these amounts and provide their dollar value to your state government, contact the payees to whom you've written these payments. You can replace a lost check and void the entry that represents it. In some cases, the circumstances surrounding an untransacted item may involve complexities ranging from the illness or death of the payee to litigation over financial problems.
QuickBooks expects you to use specific methods to enter equally specific types of transactions. If you use the "Write Checks" function to pay a bill, QuickBooks won't credit the payment against the invoice. Instead, it leaves the bill as an open debit and adds the check as a second debit. Use the "Pay Bills" function to record these kinds of remittances and keep QuickBooks on track. Likewise, if you reconcile an account before you finish entering all the transactions from the statement period, you can disrupt your ability to strike a balance. To avoid these kinds of errors, invest in some one-on-one training with a CPA who can guide you toward correct use of the software as well as of the accounting principles that underlie it.