There can be several reasons why your QuickBooks balance doesn't match what you see in your bank account. Let's review what might be causing this discrepancy.
When your bank account balance is less than your QuickBooks balance:
If there are expenses which have cleared the bank but haven't been entered into QuickBooks, the balances will differ.
- These could be handwritten checks that have cleared the bank, but not yet been entered into your check register.
- If you have debit cards attached to your bank account that haven't been linked to your QuickBooks account, the bank may have a lower balance due to QuickBooks not having all activity gathered.
Another time this may happen is when a client invoice is marked 'paid' within your QuickBooks, yet the payment hasn't yet made it to your bank account. If your client has given permission for you to issue an ACH (Automatic Clearing House, or auto-draft) payment, the payment will show as money available in QuickBooks, but will not be added to your bank account until a few business days later.
When your bank account balance is higher than your QuickBooks balance:
In this case, if you've received a payment but it has not yet been entered into your QuickBooks, the balances will differ yet again.
- As your clients make payments on their open invoices, these payments will need to be entered into QuickBooks and applied to their respective open balances. Your bank account may show a single deposit of $1,500, but only you (or your bookkeeper – Do you have one?) will know that this money needs to be entered into QuickBooks as two payments of $750.
Another reason your bank account could show as higher than your QuickBooks could be that several outstanding checks and expenses (which QuickBooks is aware of) have yet to clear the bank, but they are expected to. In this case, you should review your prior month's bank reconciliation to see what checks and other miscellaneous expenses have yet to clear and are causing the difference.
These are a few examples of what could cause a difference between your bank balance and your QuickBooks balance. Hope it's helpful! And if you'd prefer to have an expert handle your QuickBooks account and bank reconciliation for you (while providing you with monthly financials that can help you make better business decisions), let us get you a price on our clear and simple bookkeeping services.
