Surprising Changes to QBO Reconciliation

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Bank reconciliations can be such a chore. Thankfully, 'Bank Feeds' improved the pain level, but just a few dollar differences can seemingly take forever to find if your account has what amounts to a gazillion transactions.  Now, there are two new improvements to the reconciliation experience that add convenience and accuracy to really help when it comes to reconciling some date sensitive transactions.

You may not have seen these enhancements because not everyone using QBO has gotten them yet. Even if you do have them you might have simply overlooked them.

Have you noticed any changes in the notifications on the QBO Reconciliation screen?  Here are the two new 'messages' that can really make a difference:

  1. Why aren't some of these transactions marked as cleared? The first notification points out any manually entered transactions that cleared the bank after the reconciliation date. Resulting in NO auto-created check-mark in the cleared column. 
  2. We found a hidden transaction that's affecting your difference? The second notice advises that transactions cleared the bank during the statement period but had been manually recorded with a date after the statement ending period.

The power of artificial intelligence is at work here because these nonverbal clues impact our judgement on whether or not we should include transactions in our reconciliation. Previously, we had to manually identify these transaction but now AI is working to help us progress through the reconciliation.

Let's take a closer look at how this Artificial Intelligence is making these determinations for us by making use of the two date columns in our bank register.

  • Column 1 (in the illustration below) represents the date of the manually entered transaction, or if the transaction was not recorded manually, then it is the date recorded from the bank feed.
  • Column 2 (above) represents the date the transaction cleared the bank. If the transaction was not manually recorded then this date is the same as the bank feed date in Column 1 and the two dates will match.

In the prior reconciliation process (before these enhancements) the recorded date in Column 1 was used to determined if the transaction should be automatically check-marked for cleared status. Since it was possible for the cleared date to be recorded after the bank statement end date (a last day of the month expense, cleared in following month) there was a disconnect in the ending balance and that resulted in a difference in the bank balance.

Below, is an example of a transaction manually entered but cleared by the bank before the statement ending date. With the new improvements AI automatically determines the transaction should NOT be included, resulting in an un-selected transaction. That's the smarts of AI working for us!  

In the example below we have a hidden transaction. This transaction cleared the bank during the statement period but the manually entered transaction date is after the statement period.

The newly incorporated AI features of QBO's reconciliation catch this mistake and alert us to include the transaction in the reconciliation. Once the hidden transaction is included and there are no other discrepancies the reconciliation will balance (as seen in the example below). Oh happy day, no more hunting for a match in the forest of open transactions.

These little AI conveniences impact our results big time. I am enthusiastic about the probability that improvements like these will not only find their way into QBO in the future, but will significant increase our efficiency when it comes to the important, but seemingly mundane, chores related to bookkeeping and accounting.

At the same time, I'm confident that artificial intelligence like this, even if our clients don't recognize it, will enable them to perform their own QBO reconciliations with greater success during the process.

Note: As I mentioned earlier in the article, this feature has not made its way into everybody's QBO, but it is definitely on the way, so be on the look-out for it, or you might just miss it.