Historical Reconciliation in QuickBooks - Month-by-Month Method (Tie to Statements)
Behind on reconciliations? Use this CPA-designed, month-by-month method to reconcile QuickBooks to bank/credit/loan statements-fix variances, lock periods, and restore accuracy.
If months of reconciliations are missing, you can’t trust your balances-or your tax return. This guide outlines the CPA-designed month-by-month QuickBooks reconciliation method we use on cleanup projects. You’ll reconcile every bank, credit, and loan account directly to official statements, fix variances, remove stale/duplicate entries, and document changes so your file is defensible. The goal is simple: a clean, reproducible statement tie-out and a period-lock for each month. Prefer a team to do it for you? Get a QuickBooks cleanup quote-our QBO-Certified bookkeepers handle the work and a CPA signs off before you lock the period.
What “Good” Looks Like (Target State)
Each month for each account has a Reconciled status tied to the bank/issuer statement- Reconciliation reports show $0 difference; no lingering “Other Adjustment” hacks
- Undeposited Funds = 0; suspense/misc accounts cleared or documented
- AR/AP Aging totals agree to the GL; no negative customers/vendors
- Variance note explains material changes; period is locked after CPA review
Prep - Get the Right Evidence First
PDF/CSV statements for all bank, credit, and loan accounts covering the backlog
Prior reconciliations (if any) and the current Trial Balance
AR/AP Aging, Undeposited Funds detail, payroll and sales-tax reports
List of connected apps (Stripe, Shopify, payroll, POS) with payout schedules
The Month-by-Month Reconciliation Method
- Choose a Start Month
- Pick the earliest month with reliable statements. Export the Opening Trial Balance and note beginning balances per account.
- Reconcile One Account at a Time
- QBO → Accounting → Reconcile. Select the account and enter the exact statement ending balance and date.
- Check off transactions that appear on the statement. The goal is Difference = $0.
- Fix Variances Before You Force
- Missing bank charges/interest? Post entries with the right date and memo.
- Duplicate feed items? Void/reverse duplicates (don’t delete real ones).
- Wrong dates or split accounts? Edit the transaction; keep support attached.
- Clear Stale Items
- Old outstanding checks/deposits → research and void/reissue or properly reverse with proof.
- Customer payments sitting in Undeposited Funds → rebuild Bank Deposits so they match real deposits; net fees on deposit.
- Close the Month (Account)
- Save the Reconciliation Report PDF.
- Export a recon detail (CSV) and file it in the month folder with the statement.
- Repeat Across Accounts
- Finish all bank, credit, and loan accounts for the month before moving forward.
- Roll Forward
- Move to the next month; repeat steps 2-6. Keep a variance log of fixes that affect P&L or retained earnings.
Tie-Out & Adjustments After Each Month
- Run P&L, Balance Sheet, AR/AP Aging and confirm they tie to subledgers.
- Post accruals, prepaids, depreciation with schedules.
- If inventory/e-commerce: reconcile item values and payout mappings (gross → fees → net).
- Update the variance note (what changed, why, dollar impact).
Documentation & Audit Trail
- Month folder structure: /YYYY-MM/Statements, /Recons, /Entries, /Workpapers, /VarianceNote.
- Memo every adjusting entry with a link to support.
- Keep a master Checklist that shows status per account/month.
When to Use Shortcuts (and When Not To)
- Acceptable shortcut: small rounding difference with explicit Other Adjustment (rare; documented; immaterial).
- Never shortcut: missing statements, deleting real transactions to make $0, or “reconciling to the feed” instead of the statement.
Period Locks - The Final Safety Step
After CPA review, lock the period so prior months can’t drift due to accidental edits or app re-syncs. Document the lock date in your close calendar.
Mini Case Example
A SaaS firm was 11 months behind with three bank accounts and Stripe payouts. We reconciled month-by-month to statements, rebuilt Bank Deposits to net Stripe fees, corrected stale checks, and posted accruals. Result: $0 recon differences across all accounts, AR/AP agreed to the GL, and the CPA locked the year before filing.
Ready for Us to Reconcile the Backlog?
We’ll handle the month-by-month recon, deliver CPA-reviewed reports, and lock the periods.
Frequently Asked Questions
No-always reconcile to the statement. Feeds can duplicate or miss transactions; statements are authoritative.
Request PDFs from the bank (usually available for years). If truly unavailable, use confirmed balances and supporting evidence-but document thoroughly and have a CPA review.
Research status; void/reissue or record bank reversal with proof. Note state escheatment rules if a check is truly abandoned.
Rebuild Bank Deposits by statement date/amount; net merchant fees inside the deposit; then re-reconcile.
Yes-reconcile each entity’s accounts and ensure Due To/Due From balances mirror. Eliminate during consolidation with workpapers.
After the CPA review of reconciliations and adjusting entries. Lock each month as you finish to prevent drift.
View all answers in our full QuickBooks Cleanup FAQ →
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