Help with business not keeping up with reconciliations

Oct 24, 2012
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Hi everyone-
I have a new client who has not been reconciling their bank account in quickbooks EVER! I am trying to go back and start reconciling as of Jan. 1, 2012. How does this work since the beginning balance might go into opening balance equity. Or to better phrase, how do I go about doing this even though the bank account dates back to 2010.



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May 12, 2011
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United States
Start with the big picture - if the bank balance per the G/L is somewhat close to the bank balance - that's great! If G/L is way HIGHER than bank that's baaaad news cause there will probably be a big loss to record when you are done (unless there are LOTS of reconciling items to support the difference)

Now for the grunt work: First read the bank account agreement. That will tell you how long the bank gives you to report errors from the date of the bank statement. Usually it is about 2 months at most. This will help you realize that if you found a bank error in your favor (sounds like Monopoly card!) FOR EXAMPLE: if the bank debited your account say $5000 when the check amount was $500 - when reconciling a Jan 2012 statement(way oer 2 months ago) - it doesn't matter !- bank will not correct the error . Given this the furthest back I would start from would be Jan 2012 and that's just to get used to the client's bookkeeping practices. If client's G/L postings are accurate then you should try to reconcile the bank statement to them. If way off then there is no point to this and -depending on the size of the book to bank difference - I'd just adjust the book's cash balance to equal the bank's and record the diff as gain or loss.

Also - an age-old method in these cases when things are really bad is to have the client stop using the existing account and open a new one. A fresh start and now the old bank account can just clear the outstanding items and will stop being a moving target.
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