How to Reconcile a Credit Card Statement & Pay it in QB’s

Posted by on Jul 13, 2011 in Banking Module | 4 comments

Continuing on from the last session, where I showed you how to enter in credit card charges, I will now explain how to reconcile them. The reconciling feature in QuickBooks can be used for most accounts and I would strongly suggest that you use it for reconciling credit cards, Due to/From accounts, term deposits and investment accounts –  besides your bank account.

Since I have already explained to you how to reconcile a bank account, you should find reconciling credit card accounts very similar, in fact – quite the same.

As in most cases, there seems to be two or more ways to perform a task in QuickBooks. I will tell you both in this case and then use the easiest for you.

You can get to Chart of Accounts by either going to the Menu Bar/Lists/Chart of Accounts/Highlighting the name of your credit card/right click on your mouse, and reconcile credit card.

The other way is from the Home page, click on the Reconcile icon in the Banking module, which opens up the Begin Reconciliation screen. Click on the drop-down box in the Account field and choosing the credit card account from there, as shown on the left.

Make sure the the Statement Date field reflects the end date on your credit card statement. Mine was 11/30/2008.

If this is a new reconciliation the Beginning Balance will be 0.00.

If not, it will be the balance that you inserted when you set up this New account. The Ending Balance field is the balance shown at the end of your statement.

In this field I have keyed in 3419.98, as shown in the screen shot above.  I will then click on the Continue tab which will open up the Reconcile Credit Card window.

The screen shot on the right displays the transactions that need to be cleared in order to reconcile this statement. Since all of these apply to this statement date, I am going to click on Mark All.

If only a few of these cleared during the end of the statement date, then I would systematically go through each one and place a check mark besides them in the check mark column.

The proof in the pudding will be the amount in the Difference field located in the bottom right on the window. It has to be 0.00 in order for me to reconcile this statement.

As you can  see by the screen shot on the left, the Difference is 0.00, which means I can now click on the Reconcile Now tab. While it is processing, keep you hands off the keyboard until it is finished!

Make Payments screen will open up once the reconciling has finished and it will give you a choice of paying the statement now (click  on OK) or paying it later (click on Cancel). In this exercise I will click on OK.

From the screen shot on the left, you can see that two windows have opened. The first one is the Select Reconciliation Report, requesting you to print it, which I will do. I would usually just print the Detail version.

I could also save this report by clicking on the Display tab, which will display the report, then from the Menu bar/File/Save as PDF.

If printed, I would attach that report to the back of the statement and file in the MasterCard folder with the rest of the reconciled statements.

The second window has opened up in Write Cheques, where I will process the cheque for the payment of the credit card, and attach the stub to the statement. If you are unsure of how to process the cheque then click on this link.

To finish I will click on Save & Close.

QuickBooks makes the journal entry for this payment as displayed on the right.

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4 Responses to “How to Reconcile a Credit Card Statement & Pay it in QB’s”

  1. Hello,

    This article was very helpful and I have a good understanding ofthe reconciliation process up to this point. Where I get stuck is when it doesn’t balance. I am not sure what to look for or how to fix it. I work for a non-profit where several people have credit cards and they are responsible for getting their receipts scanned to me. Right now all the charges on the cc statement are in QB, but it doesn’t balance. How do I proceed from here?

    Thanks!

    Jamie

    • Larry Johnson says:

      Hi Jamie,
      If you’re speaking about your credit card statement balance, first you have to make sure the opening balance in QB matches your previous cc statement closing balance. If that’s not the problem, then look for something that has not been entered. Also enter each transaction separately or else it will be a nightmare to reconcile. Send me another comment if there is a date and time you would like to video chat with me.
      Cheers!

  2. Hi Larry,
    I have been doing my husband’s business QB for just under a year now – no problems so far.

    As we were busy with moving into a house – i havent reconciled Credit card statements since March/11.

    My dilemma is that i just Reconciled CC Statement for the month of March – everything matched.
    Now, i want to reconcile the upcoming months – from March to Aug – I am having difficulties.

    When i choose Begin Reconciliation i have this pop up where i choose the correct CC from the drop down menu. Beginning Balance shows as $1,351.45 (the balance for March). Obviously the Ending Balance will be different as CC has accumulated other charges.

    Please let me know what i am doing wrong….;(
    Regards,
    Kate

    • Larry Johnson says:

      Not sure, can’t see what you are doing. Make sure you reconcile it month by month. So…..your ending balance for April should be the figure to use.
      If u need further help, I would need to do a remote with u, in order to see your QB screen. See the FAQ page for more info.
      Larry

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