Before beginning, here's a quick recap of why the bank statement should be balanced each month as soon as you receive it:

• Finding Errors. While banks don't make errors very often, you only have a certain amount of time to alert the bank if you do find any.
• Verifying Entries. Balancing the bank statement is one way to ensure your entries are being recorded properly in QuickBooks.
• Takes Less Time. The longer you wait, the more transactions you will have to examine, making the process take longer than necessary.

Now that we know why we should balance the bank statement, here are step-by-step instructions to make sure it's done right:

1. Open QuickBooks. From the top menu, select Banking, then select Reconcile. The Begin Reconciliation window opens.

2. From the Account drop-down box, select account you wish to reconcile.

3. Enter the Statement Date as shown on the bank statement.

4. Verify that the Beginning Balance in QuickBooks is the same as the beginning balance on the bank statement. If these amounts are not the same, you may have changed or deleted a previously reconciled transaction. See #b below.

5. Enter the Ending Balance as shown on bank statement.

6. Enter any Service Charges. From the Account drop-down box, select a Bank Service Charges account.

7. If the statement shows any interest earned, record it in the Interest Earned box. From the Account drop-down box, select an Other Income account called Interest Earned. If this account does not exist, scroll up to create it.

8. Click Continue. The Reconcile window opens.

9. Place a checkmark next to each entry that appears on the both the bank statement and in the Reconcile window. Notice that there are two columns-