QuickBooks & systemsQuickBooks Reconciliation Problems: Beginning Balance Changed, Discrepancies and Other Mysteries

The internet has a favorite fix for a reconciliation that won't balance. You watch a video, un-reconcile a few transactions, re-reconcile them, and the difference changes. From $412 to $1,318. You watch a second video. Now it's $96.40, and you've lost track of what you touched.

There's a better route, and it usually doesn't involve redoing years of reconciliations.

This article explains the most common QuickBooks reconciliation problems, starting with the big one (the beginning balance that no longer matches), and shows how to find the cause instead of covering it up.

Why the beginning balance changed

When you start a reconciliation, QuickBooks sets the beginning balance from the transactions you've already reconciled. If last month ended at $18,240.15 and this month's beginning balance says $17,828.15, something inside a reconciled period changed after it was reconciled.

The usual causes:

1. Someone edited the amount or date of a reconciled transaction.
2. Someone deleted a reconciled transaction, often while "cleaning up duplicates."
3. Someone un-reconciled a transaction (changed its status from R to blank) while experimenting.
4. A new transaction was entered with a date in a reconciled period and then marked reconciled.
5. The file was converted from QuickBooks Desktop to QuickBooks Online and some reconciliation data didn't carry over cleanly.

None of these are rare. Bank feeds make it easy to delete what looks like a duplicate, and nothing stops you unless a closing date is set.

How to find a QuickBooks beginning balance discrepancy

QuickBooks keeps the evidence. You just have to know where it is.

In QuickBooks Online, when the beginning balance doesn't match, the reconcile screen usually flags it and offers a link to review the discrepancy. That opens a reconciliation discrepancy report listing reconciled transactions that changed, showing what they were and what they are now.

Next, check the audit log (Settings gear, then Audit log). Filter by date and look at edits and deletions to transactions dated in reconciled months. The log shows who made the change and when, which helps when three people share one login (please don't share one login).

In QuickBooks Desktop, the same evidence lives under Banking, then Reconcile, then Locate Discrepancies, which opens the discrepancy report and previous reconciliation reports.

Work from the oldest change forward. Fix one, refresh, and see whether the difference moves.

Fix the transaction, not the total

Once you find the changed transaction, put it back the way it was on the statement:

• An amount was edited: correct it to match the bank statement.
• A transaction was deleted: re-enter it with the original date and amount, then mark it reconciled in that period.
• A transaction was un-reconciled: mark it reconciled again, if it truly appeared on that statement.
• A new item was dated into a closed month: move it to the correct date, or delete it if it was a true duplicate that shouldn't have been reconciled.

Here's what not to do. QuickBooks will let you finish a reconciliation with a difference by adding an adjustment, which posts the amount to an account called Reconciliation Discrepancies. That makes the screen say zero. It doesn't make the books right. The actual error is still in there, and next year's version of you inherits it.

A worked example: the $412 that moved

Imagine a hypothetical staffing agency starting its June bank reconciliation. May was reconciled and ended at $18,240.15. June's beginning balance shows $17,828.15. The gap is $412.00.

The discrepancy report shows one changed item: a $412.00 customer deposit from May 14, reconciled in May, was deleted on June 3. The audit log shows the office manager deleted it while clearing what looked like a duplicate deposit in the bank feed.

It wasn't a duplicate. The real duplicate was a manually entered $412.00 deposit dated May 15 that was never reconciled.

The fix: restore the May 14 deposit (re-enter it and mark it reconciled for May), then delete the unreconciled May 15 copy. The beginning balance returns to $18,240.15, and June reconciles normally. No adjustment. About 20 minutes of work instead of re-reconciling a year.

Other QuickBooks reconciliation problems that show up a lot

• The very first reconciliation never matched. If the opening balance was entered wrong at setup, every later reconciliation inherits it. Our article on opening balances in QuickBooks covers how to fix the starting point.
• Transfers between accounts were recorded twice, once from each bank feed.
• Customer payments sit in Undeposited Funds instead of being grouped into the actual deposit.
• Reconciliations were finished with adjustments for months, leaving a pile of entries in Reconciliation Discrepancies.
• Someone reconciled to the wrong statement date.

If the process itself feels shaky, our walkthrough of the bank reconciliation process covers each step from scratch.

Stop it from happening again

1. Set a closing date in QuickBooks so reconciled periods need a password to change (Settings, then Account and settings, then Advanced, then Close the books).
2. Give each person their own user login, so the audit log means something.
3. Treat apparent duplicates in reconciled months as suspects, not trash.
4. Reconcile monthly, so a broken beginning balance is one month old when you find it.
5. Save each month's reconciliation report as a PDF with the statement.