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      How Do I Reconcile Simple Transactions in Bank Reconciliation?

      Ensure that your Bank Account Balance matches your FreshBooks Balance by regularly reviewing, matching or marking any bank transactions that come into your Bank Reconciliation. Match Expenses, Invoice Payments, Bill Payments, Other Income, and Credits. You can also Mark As Transfer, Owner’s Equity, or an Expense Refund. If you’re looking to do more complex reconciliation check out the Reconciling Complex Transactions article instead.

      Completing your Bank Reconciliation will help ensure your Accounting Reports are up to date.

      If you’ve just connected a new bank connection, you will need to set up your Bank Reconciliation before starting to reconcile. Once you have your bank connected and an Opening Balance set, you can start reconciling transactions.

       

      Accounting features like Bank Reconciliation are available on trials as well as Plus, Premium and Select plans. We also recommend inviting an Accountant to help you learn more about Bank Reconciliation.

       

      Make sure to have a copy of your statement readily available on hand or online to compare with your Bank Transactions in FreshBooks. This will help identify if there are any errors like missing or duplicate entries, and ensure that your balances are always accurate.

       

       

      Unmatched Transactions

      Before transactions are reconciled they will remain in an unmatched state. You can view your list of unmatched Bank Transactions on the left side of Bank Rec. There are two types of transactions that may or may not affect your reports inside your account:

       

      Unmatched Money-in Transactions

      • Unreconciled Bank Transactions in your account like Deposits and Invoice Payments received, and anything else that is an increase to your Bank Account Balance
      • Will not affect your Reports or FreshBooks Balance until you Match or Mark as inside Bank Rec
      • Income Entries are not automatically created when imported, they need to be manually added before they can be matched

       

      Unmatched Money-out Transactions

      • These are Unreconciled Bank Transactions in your account like Expenses, Bill Payments made and anything else that is a decrease to your Bank Account Balance
      • Displayed both under the Bank Transactions (left) and the FreshBooks Entries (right) sections inside your Bank Rec widget
      • Bank Connections automatically import Expenses in FreshBooks to correspond with the money-out transaction imported from your bank account
      • Will affect your Reports since Expense entries are automatically created when they’re imported or created manually. These Expenses flow through Petty Cash first when imported and in an unmatched status, but will be reassigned to a Bank or Credit Card Account when matched
      • If a money-out entry is Marked As, the associated imported Expense entry will be automatically deleted and will not affect your Profit & Loss Report. You can find these in your deleted Expenses in the Expenses section

       

      Likely Matches & Reconciling Transactions

      To help you get through reconciling transactions faster, FreshBooks will first suggest possible matches based on identical information from both Bank Transactions and FreshBooks Entries. You can either approve the matches or skip them using the steps below:

      1. Click on the Accounting section
      2. You’ll now see your bank account(s) listed in the Bank Reconciliation widget, click on the x left to match linkLink indicating number of transactions left to match.
      3. From here, review each row of matches and either:

        Pop-up window showing two rows of transactions with identical information in each.

        1. Uncheck any box(es) next to each row that is not a correct match (like Expense or Invoice Payments, transfers between accounts, credit card payments) and click Confirm and Continue

        2. Leave all the boxes checked and click Confirm and Continue to reconcile all of them

        3. Or click the Skip button to ignore the Likely Matches and review all transactions individually instead.

       

      Any remaining unmatched transactions will need to be matched by you manually. Depending on what kind of transaction you need to match, choose from the below options and follow the specified steps:

       

      Note: if you've reconciled all transactions on the left side under Bank Transactions, you've completed Bank Rec for the day. Transactions under FreshBooks Entries may have been imported via CSV, paid in cash, or with a bank/credit card that is not connected in FreshBooks, which means they don’t need to be matched in Bank Rec. At this time, there is no option to hide these from the Unmatched section.

       

      If you have complex transactions to reconcile like online payment deposits and fees, payroll, reimbursements and refunds, check out the Reconciling Complex Transactions article instead.

       

      Match

      If you have an Unreconciled Bank Transaction and you see the corresponding entry (or multiple entries) in the FreshBooks Entries section, use the below steps to match them together.

       

      If your FreshBooks Entry isn’t listed, check the date range, or make a new entry. If it is a Transfer, Owner’s Equity, or Expense Refund, use these steps instead.

      Only entries from the date you start Bank Rec (as stated in your Opening Balance) and moving forward will be listed.

       

      1. In the Bank Account Transactions section on the left, check off a transaction
      2. Then in the FreshBooks Entries section on the right, use the search bar if you need to find your entries, and check off one or several entries that match
      3. Click on the Match button.Two transactions selected to match with Match button selected.

       

      Filter FreshBooks Entries

      You can filter your view of FreshBooks Entries if you’d like to quickly reconcile specific entry types using these steps:

      1. Click on the settings icon on the right side of the search bar under FreshBooks EntriesSearch bar with filters pop-up indicating date range to select.
      2. Choose a new Start and End date
      3. If needed, you can specify the Entry Type (Payments & Other Income, Check Payments, Expenses, Credits or Bill Payments)
      4. Click Apply to save and new entries should appear on the right
      5. In the Bank Account Transactions section on the left, check off a transaction
      6. Then in the FreshBooks Entries section on the right, check off one or several entries that match
      7. Click on the Match button.

       

      Create a New Entry

      If the FreshBooks entry doesn’t exist yet, you can create it with these steps:

      1. Under FreshBooks Entries, click on the Create a New Entry buttonCreate a new FreshBooks entry button.
      2. Then choose from Expense, Other Income, Payment, or Bill Payment depending on what kind of matching entry you need to create
      3. Once saved, this entry will now appear in the list of FreshBooks Entries
      4. Check off the entry or entries that you’ve just created
      5. Click on the Match button.

       

      Mark As...

      If your Unreconciled Bank Transaction doesn’t require an accompanying FreshBooks Entry to match it to because it is a Transfer, Owner’s Equity or Expense Refund, choose from the below for the steps:

      You can view the exact entries posted to your Accounting Reports here.

      If the Unreconciled Bank Transaction is meant to be matched to one or multiple FreshBooks Entry/Entries, use these steps instead.

       

      Mark as Transfer

      If the transaction is a transfer to pay off a balance in another account (e.g., bank transfer for credit card debt), you can mark it as a transfer without needing to match it to a FreshBooks Entry:

      1. Check off the box next to the Bank Account Transaction
      2. Click on the Mark As button at the top
      3. Select Transfer
        Mark as transfer option for transaction.
      4. Enter details on the transfer as needed in the Note box
      5. Click Submit to finish and the Bank Account Transaction will no longer appear as an option to match. The corresponding imported Expense on the FreshBooks Entries side will also be deleted automatically
      6. Make sure to also Mark as Transfer in the other account that received a transfer or was transferred from, if that account is also connected to Bank Rec to ensure your books remain accurate.

       

      Notes:

      • When marked as a transfer, two accounts will be affected in your reports:
        • Money-in transactions marked as transfers:
          • Will increase the balance in the connected Bank account and decrease the balance in the Petty Cash account
        • Money-out transactions marked as transfers:
          • Will decrease the balance in the connected Bank account and increase the balance in the Petty Cash account
      • Once Marked as Transfers, they can be found in the Matched tab in chronological order of when you marked them with a note indicating it's a Bank Transfer
      • Use Mark as Transfer for any entries that have to be recorded with a Journal Entry (e.g., loan, long-term asset purchase, etc.) that need to be reflected in a custom account

       

      Mark as Owner’s Equity

      If the transaction is Owner’s Equity (explained here), you can mark it as so with the below steps:

      1. Check off the box next to the Bank Account Transaction
      2. Click on the Mark As button at the top
      3. Select Owner’s EquityMark as owner's equity option for transaction.
      4. Enter details on the equity as needed in the Note box
      5. Click Submit to finish. The Bank Account Transaction will no longer appear as an option to match. The corresponding imported Expense will also be deleted automatically.

       

      Notes:

      • Once marked as Owner’s Equity, you can find them in the Matched tab in chronological order of when you marked them with a note indicating it's Owner’s Equity

      • These transactions will also be located inside the Owner’s Equity account on the Chart of Accounts or the General Ledger Report

       

      Mark as an Expense Refund

      If the transaction is a payment you received from a merchant when returning an Expense, you can use the Mark as an Expense Return option. Use the below steps:

      1. Check off the box next to the Bank Account Transaction
      2. Click on the Mark As button at the top
      3. Select Expense RefundMark as expense refund option for transaction.
      4. If the expense was originally marked as Cost of Goods Sold (COGS), check the box off to Mark refund as Cost of Goods Sold
      5. Next, choose the Refunded Expense Category
      6. Then enter details about the return as needed in the Note box
      7. Click Submit to finish. The Bank Account Transaction will no longer appear as an option to match. 

       

      Notes:

      • Once marked as an Expense Refund, you can find them in the Matched tab in chronological order of when you marked them with a note indicating it's an Expense Refund

      • The refunded Expense Category selected will also be decreased when a transaction is marked as an Expense Refund; this will reflect accordingly in your Accounting Reports
        • If the Expense Refund has been marked as COGS, then the Expense Refund will appear in the COGS account that corresponds to the selected Refunded Expense Category in your General Ledger Report
        • On the Profit & Loss Report, Expense Refunds will be reflected in the Total Expenses, but not in the Refunded Expense Category
        • On the Expense Report, a breakdown of all refunds can be found in the Expense Refunds section at the end

       

      Viewing Matched Transactions

      All matched transactions, including those marked as Transfers, Owner’s Equity and Expense Refunds, can be viewed with the below steps:

      1. Click on the Accounting section
      2. Click on the x left to match link for the account you want to review in the Bank Reconciliation Widget
      3. Click on the Matched sub-tab.
        Matched sub-tab toggle selected at top of page.

       

      Notes:

      • Transactions marked as Transfers, Owner’s Equity and Expense Refunds will specify the type of entry under the FreshBooks Entry column header
      • If you’ve accidentally matched the wrong transactions together, you can unmatch them by checking off the box(es) next to the match(es), and clicking on the Unmatch Transactions button above the list. The transactions from this match will then appear in the Unmatched sub-tab for you to reconcile correctly.

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