"The bank feed is up to date" and "the bank is reconciled" sound like the same claim. They are not, and the gap between them is where most of the errors we find in a cleanup have been quietly living.
What the feed does
The bank feed downloads transactions the bank has already posted, guesses a category from previous behavior, and offers to match each one to something already in QuickBooks. Accepting those suggestions records transactions. It does not prove that what is in the books equals what the bank says.
What it cannot see
- Checks that haven't cleared. They exist in your books and not yet at the bank, which is exactly what reconciliation is designed to show.
- Duplicates. A bill paid and entered by hand, then accepted again from the feed, doubles the expense and looks perfectly normal on the profit and loss.
- Transfers counted twice. The same movement appears in both accounts; recorded as income in one and expense in the other, it inflates both sides.
- Gaps before the connection. Feeds typically reach back only 90 days. Anything earlier was never offered to you.
- Silent outages. A connection that stops refreshing looks the same as a quiet week.
Bank rules: narrow, and reviewed
Rules are worth having, but a broad rule is a machine for producing consistent errors. Match on the full payee string plus an amount range rather than a fragment; a rule keyed to "Amazon" will file inventory, equipment and a birthday present in the same account. Leave auto-add off for anything but the most predictable charges, and read your rule list once a quarter — rules outlive the arrangements that justified them.
The reconciliation itself
Reconciling means starting from the statement: enter the statement ending date and ending balance, tick every transaction that appears on the statement, and finish with a difference of zero. Reconcile every account with a statement — checking, savings, each credit card, each loan — not only the operating account. Loans are the ones most often skipped, and the balance drifts until principal and interest have not been split for a year.
When the difference isn't zero
Work through the usual causes in order, and resist the "reconcile anyway" button:
- An opening balance that was never right
- A transaction dated in the wrong month
- A duplicate from manual entry plus the feed
- A transaction edited or deleted after a previous reconciliation
- Bank fees, interest or returned items that were never recorded
The reconciliation discrepancy report shows changes made to already-reconciled transactions, which is usually the fastest way to find the last category. Forcing a reconciliation creates an adjustment entry that hides the problem in the file permanently — and every later month inherits it.
Close the month when it balances
Once every account reconciles, set a closing date with a password in QuickBooks Online. It stops the accidental edit to a prior period that quietly changes a statement your CPA has already used. Reconciling monthly, within a couple of weeks of the statement, keeps each investigation to a handful of transactions instead of a year of them.
For where this sits in the wider routine, see the monthly close.
