I received a support email from my customer:
“After I attended your QuickBooks Introductory Course, I understand the purpose of using Bank Reconciliation. I started my account in QuickBooks as at Jan 2008. While I was trying to start my Bank Reconciliation as of Jan 2008, I found that the Beginning Balance was $0.00. It was not tally with my Bank Statement. What should I do now?”
If your business was started off at the same period as your QuickBooks, then Beginning Balance of $0.00 amount is correct. That is, you do not have any opening balances in your Bank account.
If your business started off before Jan 2008, then you have to check how this Bank account was being created. Was the opening balance created correctly?
If your fiscal year was from Jan to Dec, and your business was started before Jan 2008, then you should have a brought forward figure for your bank account. Some accountant likes to use Closing Balance’s date instead of Opening Balance’s date. For example, they may set the Closing date as of 31 Dec 2007 instead of 1 Jan 2008. Then, you should see a Beginning Balance in this case. If your accountant set the opening balance’s date after 1 Jan 2008, then seeing $0.00 amount in the Beginning Balance for your Bank Reconciliation is correct. Hence, you should also see an “Opening Balance” figure in the Deposit window of the Bank Reconciliation page.
Besides, you should also have to take the unpresented cheques and deposits into consideration.
The answer for this case is in the Opening Balance of the Bank account. Check how this account was being created. It is important to set your accounts correctly at the beginning when you start using QuickBooks. Having a wrong set up will cause errors in accounts. If you are not sure on setting up your QuickBooks, do get a Certified QuickBooks Consultant.