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Financial Fable: Carla’s Income Statement is Showing Reconciliation Discrepancies

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To: Katie Redman <redmanaccountingsolutions@example.com>
From: Carla Stone <carla@carlaslandscaping.com>
Subject: Reconciliation discrepancies?
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Thank you so much for the QuickBooks training session last week!  I especially enjoyed learning about the many reports available!  Today I was playing around with the Income Statement report and was able to understand most what it was showing me.  However, there is a line called “Reconciliation Discrepancies” and there’s quite a bit of money in there.  What is this?

Thanks!

Carla

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To: Carla Stone <carla@carlaslandscaping.com>
From: Katie Redman <redmanaccountingsolutions@example.com>
Subject: RE: Reconciliation discrepancies?
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Hi Carla!

I’m glad you enjoyed the training!  The Reconciliation Discrepancies account is created by QuickBooks when you force a bank statement to reconcile.  Rather than finding the difference between the bank statement and your check register, QuickBooks will allow you to “Finish Now” and automatically post this adjustment.  Unfortunately, it means we need to do some investigating as to why this happened. It could indicate there are transactions missing or doubled-up within Quickbooks, which means those financial statements are not accurate. I’ll look at your file tomorrow and see if I can see what happened, then I’ll give you a call.

Thanks

Katie Redman, CPA

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To: Carla Stone <carla@carlaslandscaping.com>
From: Katie Redman <redmanaccountingsolutions@example.com>
Subject: RE: Reconciliation discrepancies?
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Thanks so much for all your help!  Talk to you then.

Carla


reconciliation-discrepancy-is-image
QuickBooks has some great bank reconciliation tools, but they can sometimes create a mess if you’re not careful.  If you click “Finish Now” before the difference is zero, there could be bank transfers, income, or expenses that are doubled-up or not recorded at all.  The first step in ensuring accurate financial reports is reconciling all bank and credit card statements monthly. If you see an item on your income statement called “reconciliation discrepancies” like Carla did, or you haven’t reconciled your bank & credit cards recently, contact me for help.

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