How do I reconcile complex transactions in bank reconciliation?

While reviewing your Bank Reconciliation, you can use any of the useful troubleshooting steps below to ensure your accounting reports are up to date. If you’re looking to do simple reconciliation with Match and Mark As… review How do I reconcile simple transactions in bank rec? instead.
Accounting features like Bank Reconciliation are available on trials as well as Plus, Premium and Select plans only. We also recommend inviting an accountant to help you learn more about Bank Reconciliation.

Balances Not Matching

If your Bank Account Balance does not match your real-time Bank Account’s balance, then:
  • Refresh your bank connection to make sure you have imported the latest transactions
  • Confirm that the opening balance was entered correctly - you can change your opening balance with these steps
  • Compare all unmatched and matched transactions from the left side of Bank Rec (under Unreconciled Bank Transactions) to find any missing or incorrect entries - if needed, you can add, edit, or delete these transactions to fix
If your FreshBooks Balance does not match your Bank Account Balance then:
  • Match or mark as all the transactions on the left side of your Bank Rec until there are none left
  • Check for journal entries posted to the Bank account - this will cause a difference as they will change the FreshBooks Balance but will not affect the Bank Account Balance

Complex Transactions

Check any of the below for how to best handle reconciling more complex transactions: 

Bill Payment Reconciliation

To reconcile a bill payment, you can either:
  • Mark an expense as a bill payment through Bill Payment Reconciliation
  • Match a bank transaction on the left side of bank rec to a bill payment FreshBooks Entry
When the bill payment is reconciled, this can be found in the Matched section of bank rec and the expense entry will be automatically deleted. You can find these in your deleted expenses in the Expenses section.

Invoice Payment Refunds

For full or partial invoice payment refunds, if you're exporting your reports each month to close your books, we recommend using journal entries to accommodate for this instead.
Otherwise, use the below steps to reconcile partial or full invoice payment refunds:

Full Invoice Refunds
  1. First, mark the invoice as refunded using the steps in How do I refund a payment?
  2. Then inside Bank Reconciliation, match the invoice payment with the refund from your Unreconciled Bank Transactions, along with the new $0 payment created under FreshBooks Entries
  3. Delete the expense detailing the refund, if one was created.
Unreconciled Bank TransactionsFreshBooks Entries
Transaction 1: +$800Payment 1: +$0
Transaction 2: -$800 

In this case, both the original invoice payment (originally + $800) and the refund (- $800) will now match up with the $0 payment ($0).

Partial Invoice Refunds
  1. First, mark the invoice as partially refunded using the steps in How do I refund a payment?
  2. Then inside Bank Reconciliation, match the partial refund to the original matched invoice payment under Unreconciled Bank Transactions
  3. Delete the expense detailing the refund, if one was created.
Unreconciled Bank TransactionsFreshBooks Entries
Transaction 1: +$800Payment 1: +$500
Transaction 2: -$300 

In this case, both the original payment (originally + $800) and the partial refund (- $300) will now match up with the FreshBooks invoice payment of ($500).

Manual Journal Entries

Journal entries created manually posted to a Bank/Credit Card account do not appear under the FreshBooks Entries column in bank rec. This can often apply to journal entries like:
  • Loans or Line of Credits
  • Long-Term Assets
  • Inventory
  • Tax Remittances

To reconcile transactions that require a manual journal entry, use the below steps to mark these as Transfers:
Manual journal entries written to any connected Bank account will cause the Bank Account Balance and the FreshBooks Balance to not match.
  1. Select the transaction on the left under Bank Transactions
  2. Then select the Mark As button and select Transfer
  3. In the Notes field, leave details on the manual journal entry for your accountant and select Submit to save, this will affect the Petty Cash account depending on the transaction type
  4. As an accountant, or with Advanced Accounting activated, create a journal entry to move the correct transaction from Petty Cash to the desired account instead.

Online Payment Deposits and Fees

When using online payment options like Barclaycard, PayPal, Stripe, and WePay, payments are often deposited into your bank account in batches. These deposits, along with your transaction fees, add up together to represent the total paid on your invoices.

In Bank Rec, match each deposit with their corresponding invoice payments and transaction fee expenses together:
Unreconciled Bank TransactionsFreshBooks Entries
Transaction 1: +$240Payment 1: +$250
 Expense 1: -$10
In this case, the payment gateway's deposit in Unreconciled Bank Transactions ($240) equals the invoice payment (+$250) and transaction fee expense (- $10) under FreshBooks Entries.

To find out which invoice payments are in your deposit, use the below steps to download a report from your payment gateway:

  1. Log into your Stripe dashboard
  2. Select Reports
  3. Then select the Balance report
  4. Adjust the date range as needed and select Download.
Use the steps in How long does WePay take to process payments? to download a CSV file of all Deposited Amount Transactions.
Note: If you’re using an online payment option that isn’t integrated directly to your FreshBooks account, you may have to manually record the transaction fees before the entries can be matched.

Payroll Apps

To reconcile Gusto entries, because matching many to many transactions in Bank Rec isn’t available yet, you will need to edit these imported transactions to match the amounts under FreshBooks Entries.
Reconcile Gusto entries using the below steps:
  1. In your Bank Rec widget, take note of your Bank Account Balance - after completing all of the below steps, this should remain the same
  2. Next, find the Gusto transactions for one payroll period under Unreconciled Bank Transactions, add them up and ensure the total equals the Gusto transactions under FreshBooks Entries too
  3. Note the amounts for the Gusto FreshBooks Entries, then check off the boxes next to the Gusto transactions under Unreconciled Bank Transactions
  4. Select the Bulk Actions button
  5. Then select Edit
  6. Edit the Amount fields to match the FreshBooks Entries amounts you noted earlier
  7. Select Save Changes to finish
  8. Then Match the edited Gusto Unreconciled Bank Transaction Entries to the Gusto FreshBooks Entries.

Missing Expenses

If you have expenses on the left side under Unreconciled Bank Transactions but there is no matching expense on the right side under FreshBooks Entries, there are a few possible reasons why:
  • The expense has already been matched to another transaction. You can check in the Matched tab inside your Bank Rec to confirm this.

  • The expense was not imported from this bank connection, and instead was imported and created by a different bank connection (including disconnected connections of the same Bank/Credit Card account). Only expenses from the same bank connection will appear inside your Bank Rec widget.

  • The expense has been deleted inside your expenses section. Duplicate expenses can occur if you’ve disconnected and reconnected the same bank connection, and the expense from the disconnected bank connection may be in your active expenses, while the newer expense from the active bank connection is in your deleted expenses. Deleting the active and restoring the deleted expense can be done with the steps below.

Restore Missing Expenses in Bank Rec

Use these steps to restore missing expenses in the correct Bank Rec widget for you to reconcile, especially if you’ve previously connected and disconnected the same bank connection before:
  1. First, check for all disconnected bank accounts, since expenses created from the first connection will not appear in the new connection, regardless of whether it’s the same bank account
  2. If this is a reconnected account, go to the Expenses section and select the deleted link at the bottom of the list of expenses
  3. Find the duplicate expense that belongs to the active bank connection by comparing the Source name
  4. Once you’ve found the duplicate expense, select it and select OK to undelete it
    Return to your list of active expenses by selecting All Expenses at the top of the list
  5. Next, find the duplicate expense that belongs to the disconnected bank account and hover over it, then select the trashcan icon to delete it.
Once the active expense is undeleted, and the duplicate expense from the disconnected account is deleted, the expense should now appear in the Bank Rec widget for you to reconcile.
If you’re not sure which expense belongs to which bank connection, or you need more help, please reach out to our support team.