Bank Reconciliation · United StatesWhen your books show one balance and the bank shows another, one of them is wrong. We find out which.
We match every bank, card and payment-processor transaction to your books, explain each difference and fix the entries behind it, whether the gap opened last month or eighteen months ago.
Accounting
At a glance
- Authorities
- Internal Revenue Service (IRS)
- Forms & references
- Form 1099-K
- Accounts covered
- Bank, credit card, loan, Stripe, PayPal, Shopify, Amazon and similar
- Software
- QuickBooks Online or Xero
- Format
- Monthly, or a one-off catch-up project
- You receive
- Reconciliation reports and a list of every adjustment made
Overview
What it is, and why it matters.
A bank reconciliation compares the balance and transactions in your accounting software with your bank statement for the same date, and explains every difference. It is the check that proves the books are complete, and the step most often skipped when a business gets busy.
For US businesses selling online, the hard part is rarely the bank itself. Stripe, PayPal, Shopify Payments and Amazon pay out net of fees, refunds, chargebacks and reserves, so one deposit can represent hundreds of sales. Unless gross sales and fees are recorded separately, revenue is understated, fees vanish, and the Form 1099-K a processor sends you won’t match your books.
We handle ongoing monthly reconciliations and one-off catch-up projects. Catch-ups start with the oldest unreconciled month and work forward, so each opening balance is proven before we rely on it.
Who needs it
Who typically needs it.
- 01
Online sellers
Businesses whose revenue arrives through Shopify Payments, Stripe, PayPal or Amazon settlements rather than direct customer payments.
- 02
Businesses with a tangled QuickBooks file
Companies with a large Undeposited Funds balance, duplicated transactions, or an “Uncategorized Income” account nobody can explain.
- 03
Owners abroad running US accounts
Founders outside the US moving money between a US account, a fintech balance such as Wise and a home-country bank, where transfers and currency differences are easy to misrecord.
- 04
Companies facing a deadline
Businesses that need reliable books quickly for a tax return, a loan application or a sale.
When you need it
The moments that usually trigger it.
- Your accounting software balance doesn’t match the bank and you can’t tell when it went wrong.
- Payment processor deposits have been recorded as revenue with no fees or refunds.
- You reconnected a bank feed and now see duplicate transactions.
- A Form 1099-K shows gross payments well above the sales in your books.
- Your tax return is due and several months haven’t been reconciled.
- You moved banks or changed accounting software and the opening balances don’t agree.
Scope
Exactly what we handle.
Our engagement letter lists these specifically, so you know what is included before any work begins.
- 01
Reconciliation of each bank, credit card and loan account to month-end statements.
- 02
Clearing accounts for Stripe, PayPal, Shopify Payments and Amazon, with gross sales, fees, refunds, chargebacks and reserves recorded separately.
- 03
Removal of duplicate transactions created by feeds, imports and manual entry.
- 04
Clearing out Undeposited Funds and other suspense or clearing balances.
- 05
Transfers between your own accounts, including foreign-currency transfers and the exchange differences they create.
- 06
Tie-out of processor totals to any Forms 1099-K you received.
- 07
Catch-up of prior months, oldest first, with each period closed once reconciled.
- 08
A written list of adjustments and unresolved items for you or your tax preparer.
The process
How it runs, step by step.
Timings depend on the authority and on how quickly documents come together. We tell you what’s typical for your case at the start.
Start with a conversationList every account
We identify each account that touches the business, including processor balances and any personal cards used for company costs, and collect statements for the period.
Establish a proven starting point
We agree an opening balance to a filed return or a statement date. For catch-up work, this is often the last period anyone trusted.
Match and investigate
Transactions are matched to the statement and each difference is traced to its cause: duplicates, missing entries, net deposits, transfers, or timing items such as uncleared checks.
Correct and document
We post correcting entries with clear descriptions, and anything we can’t resolve goes on an open-items list with a recommended treatment.
Close the period
Each reconciled month is closed in your software so later changes are visible, and you receive the reconciliation reports.
What we’ll need
The information to have ready.
A typical checklist. After the first conversation we send a version specific to your situation, so you don’t gather anything you don’t need.
Statements
- Bank and credit card statements (PDF) for every month in scope
- Loan statements showing principal and interest
- Payout and transaction reports from Stripe, PayPal, Shopify, Amazon or other platforms
Access
- Accountant access to QuickBooks Online or Xero
- Read-only access to processor dashboards, if you would like us to download reports ourselves
Context
- Any Forms 1099-K you received
- Details of transfers to or from personal or overseas accounts
- Your last filed tax return, to anchor opening balances
Please don’t email passports or bank statements. Once we’ve spoken, you’ll get access to a secure upload.
Common mistakes
Where this usually goes wrong.
The problems we are most often asked to fix, and what they tend to cost.
- Mistake 01
Recording processor payouts as sales
A $9,400 Stripe payout might be $10,000 of sales less $300 of fees and $300 of refunds. Booking $9,400 as revenue understates both sales and expenses, and won’t agree with the gross figure on a Form 1099-K.
- Mistake 02
Accepting every suggested bank feed match
Auto-matching can pair a deposit with the wrong invoice or add a second copy of a transaction already entered by hand. Duplicates inflate income, expenses or both.
- Mistake 03
Letting Undeposited Funds grow
Payments received but never matched to a deposit sit in a clearing account, so revenue looks higher than the cash that actually arrived.
- Mistake 04
Forcing the difference
Posting an unexplained adjustment to make the reconciliation balance hides the real problem, which is often a missing expense or a duplicated sale.
Worth knowing
The limits, stated upfront.
We reconcile to the statements and reports you provide or give us access to. Missing statements limit what can be proven.
Reconciliation identifies unusual or unsupported transactions, but it is not a fraud investigation or forensic review.
Where old differences can’t be traced, we propose a documented write-off for you to approve rather than bury them.
Amending prior tax returns after a catch-up is a separate engagement, and whether an amendment is needed depends on the size and nature of the changes.
Questions
Bank Reconciliation: frequently asked.
If yours isn’t here, ask us directly. We’ll answer in plain terms.
Ask a questionHow often should a US business reconcile its bank accounts?
Monthly, as soon as statements are available. Leaving it to year-end turns a short task into a project and leaves errors in place for months.
Why doesn’t my Form 1099-K match my income?
A 1099-K reports gross payments processed, before fees, refunds and chargebacks, so books that record net payouts will show less. Card processors report regardless of volume, while payment apps and marketplaces generally issue the form only above $20,000 and 200 transactions a year under current law. We rebuild gross sales and fees so the difference is explained.
What is Undeposited Funds, and why is my balance so large?
Undeposited Funds is a QuickBooks clearing account where customer payments wait to be grouped into a bank deposit. A large balance usually means payments were recorded but the deposits were entered separately, so some income may be counted twice.
Can you reconcile accounts I hold outside the US?
Yes, if the US business uses them. We record transfers between currencies at the rates actually applied and post the exchange difference, so both balances reconcile.
How long does a catch-up take?
It depends on the number of accounts, months and transactions, and on how quickly statements can be gathered. We give you a scoped estimate after reviewing your file and statements.
Will I need to amend old tax returns after a clean-up?
Not always. If the corrections materially change taxable income for a year already filed, an amended return may be appropriate, and we discuss that with you or your tax preparer.
Related
Often needed alongside this.
The equivalent in our other countries
Speak with a consultant
Talk to us about bank Reconciliation.
Pick the closest match and we’ll take it from there. You’ll get a written scope and fee before any work begins.
Or use our three-step guide, or email hello@fiscorra.com
